Correlation Between Guaranty Trust and Halyk Bank

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

By analyzing existing cross correlation between Guaranty Trust Holding and Halyk Bank of, you can compare the effects of market volatilities on Guaranty Trust and Halyk Bank 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 Guaranty Trust with a short position of Halyk Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guaranty Trust and Halyk Bank.

Diversification Opportunities for Guaranty Trust and Halyk Bank

0.72

Correlation Coefficient

Guaranty Trust  Halyk Bank

Poor diversification

The 3 months correlation between Guaranty and Halyk is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Trust Holding and Halyk Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halyk Bank and Guaranty Trust 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 Guaranty Trust Holding are associated (or correlated) with Halyk Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halyk Bank has no effect on the direction of Guaranty Trust i.e., Guaranty Trust and Halyk Bank go up and down completely randomly.

Pair Corralation between Guaranty Trust and Halyk Bank

Assuming the 90 days trading horizon Guaranty Trust Holding is expected to under-perform the Halyk Bank. But the stock apears to be less risky and, when comparing its historical volatility, Guaranty Trust Holding is 2.25 times less risky than Halyk Bank. The stock trades about -0.18 of its potential returns per unit of risk. The Halyk Bank of is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  1,881  in Halyk Bank of on September 22, 2024 and sell it today you would lose (59.00) from holding Halyk Bank of or give up 3.14% of portfolio value over 90 days.

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

Guaranty Trust Holding  vs.  Halyk Bank of

Guaranty Trust Holding

Risk-Adjusted Performance

0 of 100

Very Weak

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

Halyk Bank

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Halyk Bank of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Halyk Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Guaranty Trust and Halyk Bank

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

The idea behind Guaranty Trust Holding and Halyk Bank of 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.