Correlation Between Sinopharm Group and JSC Halyk

Can any of the company-specific risk be diversified away by investing in both Sinopharm 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 Sinopharm 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 Sinopharm Group Co and JSC Halyk bank, you can compare the effects of market volatilities on Sinopharm 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 Sinopharm Group with a short position of JSC Halyk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopharm Group and JSC Halyk.

Diversification Opportunities for Sinopharm Group and JSC Halyk

-0.1

Correlation Coefficient

Sinopharm Group  JSC Halyk

Good diversification

The 3 months correlation between Sinopharm and JSC is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sinopharm Group Co 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 Sinopharm 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 Sinopharm Group Co 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 Sinopharm Group i.e., Sinopharm Group and JSC Halyk go up and down completely randomly.

Pair Corralation between Sinopharm Group and JSC Halyk

Assuming the 90 days horizon Sinopharm Group Co is expected to under-perform the JSC Halyk. But the stock apears to be less risky and, when comparing its historical volatility, Sinopharm Group Co is 1.69 times less risky than JSC Halyk. The stock trades about -0.11 of its potential returns per unit of risk. The JSC Halyk bank is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,750  in JSC Halyk bank on December 21, 2024 and sell it today you would earn a total of  180.00  from holding JSC Halyk bank or generate 10.29% return on investment over 90 days.

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

Sinopharm Group Co  vs.  JSC Halyk bank

Sinopharm Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sinopharm Group Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

JSC Halyk bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JSC Halyk bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady essential indicators, JSC Halyk reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sinopharm Group and JSC Halyk

The main advantage of trading using opposite Sinopharm Group and JSC Halyk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopharm 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 Sinopharm Group Co 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.