Correlation Between Halyk Bank and M Winkworth

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

Diversification Opportunities for Halyk Bank and M Winkworth

-0.3

Correlation Coefficient

Halyk Bank  M Winkworth

Very good diversification

The 3 months correlation between Halyk and WINK is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Halyk Bank of and M Winkworth PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Winkworth 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 M Winkworth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Winkworth PLC has no effect on the direction of Halyk Bank i.e., Halyk Bank and M Winkworth go up and down completely randomly.

Pair Corralation between Halyk Bank and M Winkworth

Assuming the 90 days trading horizon Halyk Bank of is expected to generate 0.87 times more return on investment than M Winkworth. However, Halyk Bank of is 1.14 times less risky than M Winkworth. It trades about 0.13 of its potential returns per unit of risk. M Winkworth PLC is currently generating about 0.07 per unit of risk. If you would invest  1,243  in Halyk Bank of on October 7, 2024 and sell it today you would earn a total of  807.00  from holding Halyk Bank of or generate 64.92% return on investment over 90 days.

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

Halyk Bank of  vs.  M Winkworth PLC

Halyk Bank

Risk-Adjusted Performance

16 of 100

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.

M Winkworth PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Halyk Bank and M Winkworth

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

The idea behind Halyk Bank of and M Winkworth 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.