Correlation Between UNIVMUSIC GRPADR/050 and JSC Halyk

Can any of the company-specific risk be diversified away by investing in both UNIVMUSIC GRPADR/050 and JSC Halyk 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 UNIVMUSIC GRPADR/050 and JSC Halyk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNIVMUSIC GRPADR050 and JSC Halyk bank, you can compare the effects of market volatilities on UNIVMUSIC GRPADR/050 and JSC Halyk 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 UNIVMUSIC GRPADR/050 with a short position of JSC Halyk. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVMUSIC GRPADR/050 and JSC Halyk.

Diversification Opportunities for UNIVMUSIC GRPADR/050 and JSC Halyk

0.46

Correlation Coefficient

UNIVMUSIC GRPADR/050  JSC Halyk

Very weak diversification

The 3 months correlation between UNIVMUSIC and JSC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding UNIVMUSIC GRPADR050 and JSC Halyk bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC Halyk bank and UNIVMUSIC GRPADR/050 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 UNIVMUSIC GRPADR050 are associated (or correlated) with JSC Halyk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC Halyk bank has no effect on the direction of UNIVMUSIC GRPADR/050 i.e., UNIVMUSIC GRPADR/050 and JSC Halyk go up and down completely randomly.

Pair Corralation between UNIVMUSIC GRPADR/050 and JSC Halyk

Assuming the 90 days trading horizon UNIVMUSIC GRPADR050 is expected to generate 0.5 times more return on investment than JSC Halyk. However, UNIVMUSIC GRPADR050 is 2.0 times less risky than JSC Halyk. It trades about 0.18 of its potential returns per unit of risk. JSC Halyk bank is currently generating about 0.07 per unit of risk. If you would invest  1,130  in UNIVMUSIC GRPADR050 on December 4, 2024 and sell it today you would earn a total of  190.00  from holding UNIVMUSIC GRPADR050 or generate 16.81% return on investment over 90 days.

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

UNIVMUSIC GRPADR050  vs.  JSC Halyk bank

UNIVMUSIC GRPADR/050

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNIVMUSIC GRPADR050 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, UNIVMUSIC GRPADR/050 reported solid returns over the last few months and may actually be approaching a breakup point.

JSC Halyk bank

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JSC Halyk bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, JSC Halyk reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNIVMUSIC GRPADR/050 and JSC Halyk

The main advantage of trading using opposite UNIVMUSIC GRPADR/050 and JSC Halyk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVMUSIC GRPADR/050 position performs unexpectedly, JSC Halyk 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 JSC Halyk will offset losses from the drop in JSC Halyk's long position.

The idea behind UNIVMUSIC GRPADR050 and JSC Halyk bank 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.

Check out your portfolio center.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.