Correlation Between JSC Halyk and China Merchants
Can any of the company-specific risk be diversified away by investing in both JSC Halyk and China Merchants 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 JSC Halyk and China Merchants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JSC Halyk bank and China Merchants Bank, you can compare the effects of market volatilities on JSC Halyk and China Merchants 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 JSC Halyk with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSC Halyk and China Merchants.
Diversification Opportunities for JSC Halyk and China Merchants
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JSC and China is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding JSC Halyk bank and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank and JSC Halyk 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 JSC Halyk bank are associated (or correlated) with China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of JSC Halyk i.e., JSC Halyk and China Merchants go up and down completely randomly.
Pair Corralation between JSC Halyk and China Merchants
Assuming the 90 days trading horizon JSC Halyk bank is expected to generate 1.66 times more return on investment than China Merchants. However, JSC Halyk is 1.66 times more volatile than China Merchants Bank. It trades about 0.16 of its potential returns per unit of risk. China Merchants Bank is currently generating about -0.04 per unit of risk. If you would invest 1,600 in JSC Halyk bank on September 5, 2024 and sell it today you would earn a total of 200.00 from holding JSC Halyk bank or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
JSC Halyk bank vs. China Merchants Bank
Performance |
| Timeline |
| JSC Halyk bank |
| China Merchants Bank |
JSC Halyk and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSC Halyk and China Merchants
The main advantage of trading using opposite JSC Halyk and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSC Halyk position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.| JSC Halyk vs. China Merchants Bank | JSC Halyk vs. PT Bank Central | JSC Halyk vs. State Bank of | JSC Halyk vs. PT Bank Rakyat |
| China Merchants vs. PT Bank Central | China Merchants vs. State Bank of | China Merchants vs. PT Bank Rakyat |
Check out your portfolio center.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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