Correlation Between JSC Halyk and Micron Technology
Can any of the company-specific risk be diversified away by investing in both JSC Halyk and Micron Technology 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 Micron Technology 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 Micron Technology, you can compare the effects of market volatilities on JSC Halyk and Micron Technology 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 Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSC Halyk and Micron Technology.
Diversification Opportunities for JSC Halyk and Micron Technology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JSC and Micron is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding JSC Halyk bank and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology 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 Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of JSC Halyk i.e., JSC Halyk and Micron Technology go up and down completely randomly.
Pair Corralation between JSC Halyk and Micron Technology
Assuming the 90 days trading horizon JSC Halyk bank is expected to generate 0.95 times more return on investment than Micron Technology. However, JSC Halyk bank is 1.05 times less risky than Micron Technology. It trades about 0.07 of its potential returns per unit of risk. Micron Technology is currently generating about 0.02 per unit of risk. If you would invest 1,505 in JSC Halyk bank on September 24, 2024 and sell it today you would earn a total of 195.00 from holding JSC Halyk bank or generate 12.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JSC Halyk bank vs. Micron Technology
Performance |
Timeline |
JSC Halyk bank |
Micron Technology |
JSC Halyk and Micron Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JSC Halyk and Micron Technology
The main advantage of trading using opposite JSC Halyk and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSC Halyk position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.JSC Halyk vs. China Merchants Bank | ||
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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