Correlation Between JSC Halyk and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both JSC Halyk and UNITED RENTALS 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 UNITED RENTALS 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 UNITED RENTALS, you can compare the effects of market volatilities on JSC Halyk and UNITED RENTALS 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 UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSC Halyk and UNITED RENTALS.
Diversification Opportunities for JSC Halyk and UNITED RENTALS
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JSC and UNITED is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding JSC Halyk bank and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS 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 UNITED RENTALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED RENTALS has no effect on the direction of JSC Halyk i.e., JSC Halyk and UNITED RENTALS go up and down completely randomly.
Pair Corralation between JSC Halyk and UNITED RENTALS
Assuming the 90 days trading horizon JSC Halyk bank is expected to generate 1.68 times more return on investment than UNITED RENTALS. However, JSC Halyk is 1.68 times more volatile than UNITED RENTALS. It trades about 0.18 of its potential returns per unit of risk. UNITED RENTALS is currently generating about 0.09 per unit of risk. If you would invest 1,600 in JSC Halyk bank on August 25, 2024 and sell it today you would earn a total of 250.00 from holding JSC Halyk bank or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
JSC Halyk bank vs. UNITED RENTALS
Performance |
| Timeline |
| JSC Halyk bank |
| UNITED RENTALS |
JSC Halyk and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSC Halyk and UNITED RENTALS
The main advantage of trading using opposite JSC Halyk and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSC Halyk position performs unexpectedly, UNITED RENTALS 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 UNITED RENTALS will offset losses from the drop in UNITED RENTALS's long position.| JSC Halyk vs. HDFC Bank Limited | JSC Halyk vs. PT Bank Central | JSC Halyk vs. DBS Group Holdings | JSC Halyk vs. State Bank of |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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