Correlation Between Lenovo Group and JSC Halyk

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

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

Diversification Opportunities for Lenovo Group and JSC Halyk

-0.52

Correlation Coefficient

Lenovo Group  JSC Halyk

Excellent diversification

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

Pair Corralation between Lenovo Group and JSC Halyk

Assuming the 90 days trading horizon Lenovo Group is expected to generate 2.81 times less return on investment than JSC Halyk. In addition to that, Lenovo Group is 1.03 times more volatile than JSC Halyk bank. It trades about 0.08 of its total potential returns per unit of risk. JSC Halyk bank is currently generating about 0.24 per unit of volatility. If you would invest  1,725  in JSC Halyk bank on October 10, 2024 and sell it today you would earn a total of  265.00  from holding JSC Halyk bank or generate 15.36% return on investment over 90 days.

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

Lenovo Group Limited  vs.  JSC Halyk bank

Lenovo Group Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

JSC Halyk bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JSC Halyk bank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, JSC Halyk reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lenovo Group and JSC Halyk

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

The idea behind Lenovo Group Limited and JSC Halyk bank 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.