Correlation Between Halyk Bank and Axis Bank

Can any of the company-specific risk be diversified away by investing in both Halyk Bank and Axis 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 Halyk Bank and Axis Bank 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 Axis Bank Ltd, you can compare the effects of market volatilities on Halyk Bank and Axis 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 Halyk Bank with a short position of Axis Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halyk Bank and Axis Bank.

Diversification Opportunities for Halyk Bank and Axis Bank

0.19

Correlation Coefficient

Halyk Bank  Axis Bank

Average diversification

The 3 months correlation between Halyk and Axis is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Halyk Bank of and Axis Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axis Bank 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 Axis Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axis Bank has no effect on the direction of Halyk Bank i.e., Halyk Bank and Axis Bank go up and down completely randomly.

Pair Corralation between Halyk Bank and Axis Bank

Assuming the 90 days trading horizon Halyk Bank of is expected to generate 1.28 times more return on investment than Axis Bank. However, Halyk Bank is 1.28 times more volatile than Axis Bank Ltd. It trades about 0.22 of its potential returns per unit of risk. Axis Bank Ltd is currently generating about 0.03 per unit of risk. If you would invest  1,922  in Halyk Bank of on December 30, 2024 and sell it today you would earn a total of  548.00  from holding Halyk Bank of or generate 28.51% return on investment over 90 days.

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

Halyk Bank of  vs.  Axis Bank Ltd

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 17 (%) 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.

Axis Bank

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axis Bank Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Axis Bank is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Halyk Bank and Axis Bank

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

The idea behind Halyk Bank of and Axis Bank Ltd 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.