Correlation Between Freedom Holding and TLGY Acquisition

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

Diversification Opportunities for Freedom Holding and TLGY Acquisition

0.91

Correlation Coefficient

Freedom Holding  TLGY Acquisition

Almost no diversification

The 3 months correlation between Freedom and TLGY is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and TLGY Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TLGY Acquisition 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 TLGY Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TLGY Acquisition Corp has no effect on the direction of Freedom Holding i.e., Freedom Holding and TLGY Acquisition go up and down completely randomly.

Pair Corralation between Freedom Holding and TLGY Acquisition

Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 24.6 times more return on investment than TLGY Acquisition. However, Freedom Holding is 24.6 times more volatile than TLGY Acquisition Corp. It trades about 0.31 of its potential returns per unit of risk. TLGY Acquisition Corp is currently generating about 0.27 per unit of risk. If you would invest  9,586  in Freedom Holding Corp on September 18, 2024 and sell it today you would earn a total of  3,769  from holding Freedom Holding Corp or generate 39.32% return on investment over 90 days.

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

Freedom Holding Corp  vs.  TLGY Acquisition Corp

Freedom Holding Corp

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical indicators, Freedom Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

TLGY Acquisition Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TLGY Acquisition Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, TLGY Acquisition 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 TLGY Acquisition

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

The idea behind Freedom Holding Corp and TLGY Acquisition 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.