Correlation Between JSC Halyk and BNP Paribas

Can any of the company-specific risk be diversified away by investing in both JSC Halyk and BNP Paribas 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 BNP Paribas 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 BNP Paribas SA, you can compare the effects of market volatilities on JSC Halyk and BNP Paribas 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 BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSC Halyk and BNP Paribas.

Diversification Opportunities for JSC Halyk and BNP Paribas

0.5

Correlation Coefficient

JSC Halyk  BNP Paribas

Very weak diversification

The 3 months correlation between JSC and BNP is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding JSC Halyk bank and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA 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 BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas SA has no effect on the direction of JSC Halyk i.e., JSC Halyk and BNP Paribas go up and down completely randomly.

Pair Corralation between JSC Halyk and BNP Paribas

Assuming the 90 days trading horizon JSC Halyk is expected to generate 1.89 times less return on investment than BNP Paribas. In addition to that, JSC Halyk is 1.73 times more volatile than BNP Paribas SA. It trades about 0.11 of its total potential returns per unit of risk. BNP Paribas SA is currently generating about 0.36 per unit of volatility. If you would invest  5,747  in BNP Paribas SA on December 20, 2024 and sell it today you would earn a total of  2,346  from holding BNP Paribas SA or generate 40.82% return on investment over 90 days.

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

JSC Halyk bank  vs.  BNP Paribas SA

JSC Halyk bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JSC Halyk bank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, JSC Halyk reported solid returns over the last few months and may actually be approaching a breakup point.

BNP Paribas SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in BNP Paribas SA are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, BNP Paribas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JSC Halyk and BNP Paribas

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

The idea behind JSC Halyk bank and BNP Paribas SA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.