Correlation Between Waste Management and Halyk Bank

Can any of the company-specific risk be diversified away by investing in both Waste Management and Halyk Bank 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 Waste Management and Halyk Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Waste Management and Halyk Bank of, you can compare the effects of market volatilities on Waste Management and Halyk Bank 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 Waste Management with a short position of Halyk Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and Halyk Bank.

Diversification Opportunities for Waste Management and Halyk Bank

0.34

Correlation Coefficient

Waste Management  Halyk Bank

Weak diversification

The 3 months correlation between Waste and Halyk is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and Halyk Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halyk Bank and Waste Management 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 Waste Management are associated (or correlated) with Halyk Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halyk Bank has no effect on the direction of Waste Management i.e., Waste Management and Halyk Bank go up and down completely randomly.

Pair Corralation between Waste Management and Halyk Bank

Assuming the 90 days trading horizon Waste Management is expected to generate 2.14 times less return on investment than Halyk Bank. But when comparing it to its historical volatility, Waste Management is 1.28 times less risky than Halyk Bank. It trades about 0.05 of its potential returns per unit of risk. Halyk Bank of is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,260  in Halyk Bank of on October 4, 2024 and sell it today you would earn a total of  684.00  from holding Halyk Bank of or generate 54.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.47%
Values	Daily Returns

Waste Management  vs.  Halyk Bank of

Waste Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waste Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Waste Management is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Halyk Bank

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Halyk Bank of are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Halyk Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Waste Management and Halyk Bank

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

The idea behind Waste Management and Halyk Bank of 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.