Correlation Between Freedom Holding and Springview Holdings

Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Springview Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Freedom Holding and Springview Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Freedom Holding Corp and Springview Holdings Ltd, you can compare the effects of market volatilities on Freedom Holding and Springview Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Freedom Holding with a short position of Springview Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Springview Holdings.

Diversification Opportunities for Freedom Holding and Springview Holdings

-0.69

Correlation Coefficient

Freedom Holding  Springview Holdings

Excellent diversification

The 3 months correlation between Freedom and Springview is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Springview Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Springview Holdings and Freedom Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Freedom Holding Corp are associated (or correlated) with Springview Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Springview Holdings has no effect on the direction of Freedom Holding i.e., Freedom Holding and Springview Holdings go up and down completely randomly.

Pair Corralation between Freedom Holding and Springview Holdings

Given the investment horizon of 90 days Freedom Holding is expected to generate 37.49 times less return on investment than Springview Holdings. But when comparing it to its historical volatility, Freedom Holding Corp is 53.82 times less risky than Springview Holdings. It trades about 0.15 of its potential returns per unit of risk. Springview Holdings Ltd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Springview Holdings Ltd on December 2, 2024 and sell it today you would earn a total of  377.00  from holding Springview Holdings Ltd or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	37.65%
Values	Daily Returns

Freedom Holding Corp  vs.  Springview Holdings Ltd

Freedom Holding Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Freedom Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Springview Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Springview Holdings Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical indicators, Springview Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Freedom Holding and Springview Holdings

The main advantage of trading using opposite Freedom Holding and Springview Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Springview Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Springview Holdings will offset losses from the drop in Springview Holdings' long position.

The idea behind Freedom Holding Corp and Springview Holdings Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.