Correlation Between Kaspi Bank and Model N

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

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

Diversification Opportunities for Kaspi Bank and Model N

0.68

Correlation Coefficient

Kaspi Bank  Model N

Poor diversification

The 3 months correlation between Kaspi and Model is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kaspi Bank Joint and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N and Kaspi 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 Kaspi Bank Joint are associated (or correlated) with Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of Kaspi Bank i.e., Kaspi Bank and Model N go up and down completely randomly.

Pair Corralation between Kaspi Bank and Model N

If you would invest  3,000  in Model N on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Model N or generate 0.0% return on investment over 90 days.

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

Kaspi Bank Joint  vs.  Model N

Kaspi Bank Joint

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaspi Bank Joint has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kaspi Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Model N

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Model N has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Model N is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kaspi Bank and Model N

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

The idea behind Kaspi Bank Joint and Model N 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.