Correlation Between Halyk Bank and Dotdigital Group

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

Diversification Opportunities for Halyk Bank and Dotdigital Group

0.68

Correlation Coefficient

Halyk Bank  Dotdigital Group

Poor diversification

The 3 months correlation between Halyk and Dotdigital is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Halyk Bank of and Dotdigital Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dotdigital Group Plc 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 Dotdigital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dotdigital Group Plc has no effect on the direction of Halyk Bank i.e., Halyk Bank and Dotdigital Group go up and down completely randomly.

Pair Corralation between Halyk Bank and Dotdigital Group

Assuming the 90 days trading horizon Halyk Bank of is expected to generate 0.48 times more return on investment than Dotdigital Group. However, Halyk Bank of is 2.08 times less risky than Dotdigital Group. It trades about 0.13 of its potential returns per unit of risk. Dotdigital Group Plc is currently generating about 0.05 per unit of risk. If you would invest  1,708  in Halyk Bank of on September 4, 2024 and sell it today you would earn a total of  190.00  from holding Halyk Bank of or generate 11.12% return on investment over 90 days.

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

Halyk Bank of  vs.  Dotdigital Group Plc

Halyk Bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Halyk Bank of are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Halyk Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dotdigital Group Plc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dotdigital Group Plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Dotdigital Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Halyk Bank and Dotdigital Group

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

The idea behind Halyk Bank of and Dotdigital Group Plc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.