Correlation Between Perma Fix and JSC Halyk

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

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

Diversification Opportunities for Perma Fix and JSC Halyk

-0.15

Correlation Coefficient

Perma Fix  JSC Halyk

Good diversification

The 3 months correlation between Perma and JSC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Servic 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 Perma Fix 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 Perma Fix Environmental Services 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 Perma Fix i.e., Perma Fix and JSC Halyk go up and down completely randomly.

Pair Corralation between Perma Fix and JSC Halyk

Assuming the 90 days trading horizon Perma Fix Environmental Services is expected to under-perform the JSC Halyk. But the stock apears to be less risky and, when comparing its historical volatility, Perma Fix Environmental Services is 1.06 times less risky than JSC Halyk. The stock trades about -0.15 of its potential returns per unit of risk. The JSC Halyk bank is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,677  in JSC Halyk bank on October 6, 2024 and sell it today you would earn a total of  223.00  from holding JSC Halyk bank or generate 13.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Perma Fix Environmental Servic  vs.  JSC Halyk bank

Perma Fix Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

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

JSC Halyk bank

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JSC Halyk bank are ranked lower than 9 (%) 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 Perma Fix and JSC Halyk

The main advantage of trading using opposite Perma Fix and JSC Halyk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perma Fix 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 Perma Fix Environmental Services 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.