Correlation Between Nationwide Building and Halyk Bank

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

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

Diversification Opportunities for Nationwide Building and Halyk Bank

-0.19

Correlation Coefficient

Nationwide Building  Halyk Bank

Good diversification

The 3 months correlation between Nationwide and Halyk is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Building Society and Halyk Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halyk Bank and Nationwide Building 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 Nationwide Building Society 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 Nationwide Building i.e., Nationwide Building and Halyk Bank go up and down completely randomly.

Pair Corralation between Nationwide Building and Halyk Bank

Assuming the 90 days trading horizon Nationwide Building Society is expected to under-perform the Halyk Bank. But the stock apears to be less risky and, when comparing its historical volatility, Nationwide Building Society is 7.97 times less risky than Halyk Bank. The stock trades about -0.03 of its potential returns per unit of risk. The Halyk Bank of is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,676  in Halyk Bank of on September 24, 2024 and sell it today you would earn a total of  146.00  from holding Halyk Bank of or generate 8.71% return on investment over 90 days.

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

Nationwide Building Society  vs.  Halyk Bank of

Nationwide Building

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Building Society has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Nationwide Building is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Nationwide Building and Halyk Bank

The main advantage of trading using opposite Nationwide Building and Halyk Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Building 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 Nationwide Building Society 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.