Correlation Between Freedom Holding and Juniata Valley

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

Diversification Opportunities for Freedom Holding and Juniata Valley

0.9

Correlation Coefficient

Freedom Holding  Juniata Valley

Almost no diversification

The 3 months correlation between Freedom and Juniata is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial 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 Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of Freedom Holding i.e., Freedom Holding and Juniata Valley go up and down completely randomly.

Pair Corralation between Freedom Holding and Juniata Valley

Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.46 times more return on investment than Juniata Valley. However, Freedom Holding Corp is 2.16 times less risky than Juniata Valley. It trades about 0.07 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.02 per unit of risk. If you would invest  6,230  in Freedom Holding Corp on September 29, 2024 and sell it today you would earn a total of  6,744  from holding Freedom Holding Corp or generate 108.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	89.52%
Values	Daily Returns

Freedom Holding Corp  vs.  Juniata Valley Financial

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 abnormal technical indicators, Freedom Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Juniata Valley Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Freedom Holding and Juniata Valley

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

The idea behind Freedom Holding Corp and Juniata Valley Financial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..