Correlation Between Empire Metals and Halyk Bank

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

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

Diversification Opportunities for Empire Metals and Halyk Bank

-0.61

Correlation Coefficient

Empire Metals  Halyk Bank

Excellent diversification

The 3 months correlation between Empire and Halyk is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Empire Metals Limited and Halyk Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halyk Bank and Empire Metals 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 Empire Metals Limited 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 Empire Metals i.e., Empire Metals and Halyk Bank go up and down completely randomly.

Pair Corralation between Empire Metals and Halyk Bank

Assuming the 90 days trading horizon Empire Metals Limited is expected to generate 1.71 times more return on investment than Halyk Bank. However, Empire Metals is 1.71 times more volatile than Halyk Bank of. It trades about 0.15 of its potential returns per unit of risk. Halyk Bank of is currently generating about 0.16 per unit of risk. If you would invest  625.00  in Empire Metals Limited on October 4, 2024 and sell it today you would earn a total of  60.00  from holding Empire Metals Limited or generate 9.6% return on investment over 90 days.

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

Empire Metals Limited  vs.  Halyk Bank of

Empire Metals Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Empire Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Empire Metals is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Empire Metals and Halyk Bank

The main advantage of trading using opposite Empire Metals and Halyk Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Metals 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 Empire Metals Limited 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.