Correlation Between Freedom Holding and SOUTHERN

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

Diversification Opportunities for Freedom Holding and SOUTHERN

-0.56

Correlation Coefficient

Freedom Holding  SOUTHERN

Excellent diversification

The 3 months correlation between Freedom and SOUTHERN is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and SOUTHERN PER CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN PER P 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN PER P has no effect on the direction of Freedom Holding i.e., Freedom Holding and SOUTHERN go up and down completely randomly.

Pair Corralation between Freedom Holding and SOUTHERN

Given the investment horizon of 90 days Freedom Holding is expected to generate 11.09 times less return on investment than SOUTHERN. But when comparing it to its historical volatility, Freedom Holding Corp is 19.67 times less risky than SOUTHERN. It trades about 0.07 of its potential returns per unit of risk. SOUTHERN PER CORP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  11,308  in SOUTHERN PER CORP on October 8, 2024 and sell it today you would lose (211.00) from holding SOUTHERN PER CORP or give up 1.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.37%
Values	Daily Returns

Freedom Holding Corp  vs.  SOUTHERN PER CORP

Freedom Holding Corp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 22 (%) 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.

SOUTHERN PER P

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Freedom Holding and SOUTHERN

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

The idea behind Freedom Holding Corp and SOUTHERN PER 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 Stocks Directory module to find actively traded stocks across global markets.