Correlation Between Halyk Bank and GSTechnologies

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

Diversification Opportunities for Halyk Bank and GSTechnologies

0.88

Correlation Coefficient

Halyk Bank  GSTechnologies

Very poor diversification

The 3 months correlation between Halyk and GSTechnologies is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Halyk Bank of and GSTechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSTechnologies 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 GSTechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSTechnologies has no effect on the direction of Halyk Bank i.e., Halyk Bank and GSTechnologies go up and down completely randomly.

Pair Corralation between Halyk Bank and GSTechnologies

Assuming the 90 days trading horizon Halyk Bank is expected to generate 9.78 times less return on investment than GSTechnologies. But when comparing it to its historical volatility, Halyk Bank of is 4.54 times less risky than GSTechnologies. It trades about 0.09 of its potential returns per unit of risk. GSTechnologies is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  78.00  in GSTechnologies on September 21, 2024 and sell it today you would earn a total of  82.00  from holding GSTechnologies or generate 105.13% return on investment over 90 days.

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

Halyk Bank of  vs.  GSTechnologies

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.

GSTechnologies

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GSTechnologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GSTechnologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Halyk Bank and GSTechnologies

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

The idea behind Halyk Bank of and GSTechnologies 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 Global Correlations module to find global opportunities by holding instruments from different markets.