Correlation Between Freedom Holding and SuRo Capital

Can any of the company-specific risk be diversified away by investing in both Freedom Holding and SuRo Capital 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 SuRo Capital 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 SuRo Capital Corp, you can compare the effects of market volatilities on Freedom Holding and SuRo Capital 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 SuRo Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and SuRo Capital.

Diversification Opportunities for Freedom Holding and SuRo Capital

0.12

Correlation Coefficient

Freedom Holding  SuRo Capital

Average diversification

The 3 months correlation between Freedom and SuRo is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and SuRo Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuRo Capital Corp 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 SuRo Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuRo Capital Corp has no effect on the direction of Freedom Holding i.e., Freedom Holding and SuRo Capital go up and down completely randomly.

Pair Corralation between Freedom Holding and SuRo Capital

Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.48 times more return on investment than SuRo Capital. However, Freedom Holding Corp is 2.1 times less risky than SuRo Capital. It trades about 0.11 of its potential returns per unit of risk. SuRo Capital Corp is currently generating about 0.04 per unit of risk. If you would invest  12,249  in Freedom Holding Corp on December 4, 2024 and sell it today you would earn a total of  1,727  from holding Freedom Holding Corp or generate 14.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Freedom Holding Corp  vs.  SuRo Capital Corp

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 8 (%) 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.

SuRo Capital Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SuRo Capital Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SuRo Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Freedom Holding and SuRo Capital

The main advantage of trading using opposite Freedom Holding and SuRo Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, SuRo Capital 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 SuRo Capital will offset losses from the drop in SuRo Capital's long position.

The idea behind Freedom Holding Corp and SuRo Capital Corp 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.