Correlation Between JSC Halyk and TRAINLINE PLC

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

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

Diversification Opportunities for JSC Halyk and TRAINLINE PLC

0.81

Correlation Coefficient

JSC Halyk  TRAINLINE PLC

Very poor diversification

The 3 months correlation between JSC and TRAINLINE is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JSC Halyk bank and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS and JSC Halyk 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 JSC Halyk bank are associated (or correlated) with TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of JSC Halyk i.e., JSC Halyk and TRAINLINE PLC go up and down completely randomly.

Pair Corralation between JSC Halyk and TRAINLINE PLC

Assuming the 90 days trading horizon JSC Halyk bank is expected to generate 2.05 times more return on investment than TRAINLINE PLC. However, JSC Halyk is 2.05 times more volatile than TRAINLINE PLC LS. It trades about 0.24 of its potential returns per unit of risk. TRAINLINE PLC LS is currently generating about -0.14 per unit of risk. If you would invest  1,725  in JSC Halyk bank on October 9, 2024 and sell it today you would earn a total of  265.00  from holding JSC Halyk bank or generate 15.36% return on investment over 90 days.

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

JSC Halyk bank  vs.  TRAINLINE PLC LS

JSC Halyk bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JSC Halyk bank are ranked lower than 10 (%) 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.

TRAINLINE PLC LS

Risk-Adjusted Performance

14 of 100

Good

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

Pair Trading with JSC Halyk and TRAINLINE PLC

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

The idea behind JSC Halyk bank and TRAINLINE PLC LS 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 Commodity Directory module to find actively traded commodities issued by global exchanges.