Correlation Between Freedom Holding and BlackRock Long

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

Diversification Opportunities for Freedom Holding and BlackRock Long

-0.37

Correlation Coefficient

Freedom Holding  BlackRock Long

Very good diversification

The 3 months correlation between Freedom and BlackRock is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and BlackRock Long Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Long Term 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 BlackRock Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Long Term has no effect on the direction of Freedom Holding i.e., Freedom Holding and BlackRock Long go up and down completely randomly.

Pair Corralation between Freedom Holding and BlackRock Long

Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 2.56 times more return on investment than BlackRock Long. However, Freedom Holding is 2.56 times more volatile than BlackRock Long Term Municipal. It trades about 0.27 of its potential returns per unit of risk. BlackRock Long Term Municipal is currently generating about 0.04 per unit of risk. If you would invest  8,917  in Freedom Holding Corp on September 3, 2024 and sell it today you would earn a total of  2,971  from holding Freedom Holding Corp or generate 33.32% return on investment over 90 days.

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

Freedom Holding Corp  vs.  BlackRock Long Term Municipal

Freedom Holding Corp

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, Freedom Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

BlackRock Long Term

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Long Term Municipal are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BlackRock Long 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 BlackRock Long

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

The idea behind Freedom Holding Corp and BlackRock Long Term Municipal 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.