Correlation Between Halyk Bank and CarMax

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

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

Diversification Opportunities for Halyk Bank and CarMax

-0.58

Correlation Coefficient

Halyk Bank  CarMax

Excellent diversification

The 3 months correlation between Halyk and CarMax is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Halyk Bank of and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc and Halyk Bank 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 Halyk Bank of are associated (or correlated) with CarMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarMax Inc has no effect on the direction of Halyk Bank i.e., Halyk Bank and CarMax go up and down completely randomly.

Pair Corralation between Halyk Bank and CarMax

Assuming the 90 days trading horizon Halyk Bank of is expected to generate 0.87 times more return on investment than CarMax. However, Halyk Bank of is 1.15 times less risky than CarMax. It trades about 0.21 of its potential returns per unit of risk. CarMax Inc is currently generating about -0.05 per unit of risk. If you would invest  1,922  in Halyk Bank of on December 28, 2024 and sell it today you would earn a total of  483.00  from holding Halyk Bank of or generate 25.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Halyk Bank of  vs.  CarMax Inc

Halyk Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Halyk Bank of are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Halyk Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

CarMax Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CarMax Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CarMax is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Halyk Bank and CarMax

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

The idea behind Halyk Bank of and CarMax Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.