Correlation Between Halyk Bank and ITM Power
Can any of the company-specific risk be diversified away by investing in both Halyk Bank and ITM Power 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 ITM Power 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 ITM Power, you can compare the effects of market volatilities on Halyk Bank and ITM Power 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 ITM Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halyk Bank and ITM Power.
Diversification Opportunities for Halyk Bank and ITM Power
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Halyk and ITM is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Halyk Bank of and ITM Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Power 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 ITM Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Power has no effect on the direction of Halyk Bank i.e., Halyk Bank and ITM Power go up and down completely randomly.
Pair Corralation between Halyk Bank and ITM Power
Assuming the 90 days trading horizon Halyk Bank is expected to generate 1.12 times less return on investment than ITM Power. But when comparing it to its historical volatility, Halyk Bank of is 2.42 times less risky than ITM Power. It trades about 0.27 of its potential returns per unit of risk. ITM Power is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,340 in ITM Power on October 20, 2024 and sell it today you would earn a total of 302.00 from holding ITM Power or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Halyk Bank of vs. ITM Power
Performance |
| Timeline |
| Halyk Bank |
| ITM Power |
Halyk Bank and ITM Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halyk Bank and ITM Power
The main advantage of trading using opposite Halyk Bank and ITM Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halyk Bank position performs unexpectedly, ITM Power 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 ITM Power will offset losses from the drop in ITM Power's long position.| Halyk Bank vs. Verizon Communications | Halyk Bank vs. Zegona Communications Plc | Halyk Bank vs. Fair Oaks Income | Halyk Bank vs. Wizz Air Holdings |
| ITM Power vs. Uniper SE | ITM Power vs. Mulberry Group PLC | ITM Power vs. London Security Plc | ITM Power vs. Triad Group PLC |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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