Correlation Between JSC Halyk and Warner Music
Can any of the company-specific risk be diversified away by investing in both JSC Halyk and Warner Music 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 Warner Music 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 Warner Music Group, you can compare the effects of market volatilities on JSC Halyk and Warner Music 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 Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSC Halyk and Warner Music.
Diversification Opportunities for JSC Halyk and Warner Music
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JSC and Warner is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding JSC Halyk bank and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music Group 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of JSC Halyk i.e., JSC Halyk and Warner Music go up and down completely randomly.
Pair Corralation between JSC Halyk and Warner Music
Assuming the 90 days trading horizon JSC Halyk bank is expected to generate 1.96 times more return on investment than Warner Music. However, JSC Halyk is 1.96 times more volatile than Warner Music Group. It trades about 0.06 of its potential returns per unit of risk. Warner Music Group is currently generating about 0.01 per unit of risk. If you would invest 1,174 in JSC Halyk bank on September 12, 2024 and sell it today you would earn a total of 606.00 from holding JSC Halyk bank or generate 51.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
JSC Halyk bank vs. Warner Music Group
Performance |
| Timeline |
| JSC Halyk bank |
| Warner Music Group |
JSC Halyk and Warner Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSC Halyk and Warner Music
The main advantage of trading using opposite JSC Halyk and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSC Halyk position performs unexpectedly, Warner Music 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 Warner Music will offset losses from the drop in Warner Music's long position.The idea behind JSC Halyk bank and Warner Music Group 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.| Warner Music vs. The Walt Disney | Warner Music vs. Superior Plus Corp | Warner Music vs. SIVERS SEMICONDUCTORS AB | Warner Music vs. Norsk Hydro ASA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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