Correlation Between Halyk Bank and Enbridge
Can any of the company-specific risk be diversified away by investing in both Halyk Bank and Enbridge 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 Halyk Bank and Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halyk Bank of and Enbridge, you can compare the effects of market volatilities on Halyk Bank and Enbridge 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 Halyk Bank with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halyk Bank and Enbridge.
Diversification Opportunities for Halyk Bank and Enbridge
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Halyk and Enbridge is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Halyk Bank of and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Halyk 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 Halyk Bank of are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Halyk Bank i.e., Halyk Bank and Enbridge go up and down completely randomly.
Pair Corralation between Halyk Bank and Enbridge
Assuming the 90 days trading horizon Halyk Bank is expected to generate 1.75 times less return on investment than Enbridge. In addition to that, Halyk Bank is 2.14 times more volatile than Enbridge. It trades about 0.21 of its total potential returns per unit of risk. Enbridge is currently generating about 0.78 per unit of volatility. If you would invest 5,870 in Enbridge on October 21, 2024 and sell it today you would earn a total of 490.00 from holding Enbridge or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 68.42% |
| Values | Daily Returns |
Halyk Bank of vs. Enbridge
Performance |
| Timeline |
| Halyk Bank |
| Enbridge |
Halyk Bank and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halyk Bank and Enbridge
The main advantage of trading using opposite Halyk Bank and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halyk Bank position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.The idea behind Halyk Bank of and Enbridge 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.| Enbridge vs. Catalyst Media Group | Enbridge vs. Bloomsbury Publishing Plc | Enbridge vs. JD Sports Fashion | Enbridge vs. Host Hotels Resorts |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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