Correlation Between Halyk Bank and Tata Steel

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

Diversification Opportunities for Halyk Bank and Tata Steel

0.52

Correlation Coefficient

Halyk Bank  Tata Steel

Very weak diversification

The 3 months correlation between Halyk and Tata is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Halyk Bank of and Tata Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tata Steel Limited 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 Tata Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tata Steel Limited has no effect on the direction of Halyk Bank i.e., Halyk Bank and Tata Steel go up and down completely randomly.

Pair Corralation between Halyk Bank and Tata Steel

Assuming the 90 days trading horizon Halyk Bank of is expected to generate 0.97 times more return on investment than Tata Steel. However, Halyk Bank of is 1.03 times less risky than Tata Steel. It trades about 0.22 of its potential returns per unit of risk. Tata Steel Limited is currently generating about 0.12 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	Weak
Accuracy	100.0%
Values	Daily Returns

Halyk Bank of  vs.  Tata Steel Limited

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.

Tata Steel Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tata Steel Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Tata Steel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Halyk Bank and Tata Steel

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

The idea behind Halyk Bank of and Tata Steel Limited 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.