Correlation Between Freedom Holding and FREEPORT

Can any of the company-specific risk be diversified away by investing in both Freedom Holding and FREEPORT 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 FREEPORT 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 FREEPORT MCMORAN INC 525, you can compare the effects of market volatilities on Freedom Holding and FREEPORT 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 FREEPORT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and FREEPORT.

Diversification Opportunities for Freedom Holding and FREEPORT

-0.43

Correlation Coefficient

Freedom Holding  FREEPORT

Very good diversification

The 3 months correlation between Freedom and FREEPORT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and FREEPORT MCMORAN INC 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREEPORT MCMORAN INC 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 FREEPORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREEPORT MCMORAN INC has no effect on the direction of Freedom Holding i.e., Freedom Holding and FREEPORT go up and down completely randomly.

Pair Corralation between Freedom Holding and FREEPORT

Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 4.37 times more return on investment than FREEPORT. However, Freedom Holding is 4.37 times more volatile than FREEPORT MCMORAN INC 525. It trades about 0.12 of its potential returns per unit of risk. FREEPORT MCMORAN INC 525 is currently generating about -0.09 per unit of risk. If you would invest  12,271  in Freedom Holding Corp on September 21, 2024 and sell it today you would earn a total of  572.00  from holding Freedom Holding Corp or generate 4.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Freedom Holding Corp  vs.  FREEPORT MCMORAN INC 525

Freedom Holding Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical indicators, Freedom Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

FREEPORT MCMORAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FREEPORT MCMORAN INC 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FREEPORT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Freedom Holding and FREEPORT

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

The idea behind Freedom Holding Corp and FREEPORT MCMORAN INC 525 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.