Correlation Between Halyk Bank and Air France

Can any of the company-specific risk be diversified away by investing in both Halyk Bank and Air France 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 Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Halyk Bank AO and Air France KLM, you can compare the effects of market volatilities on Halyk Bank and Air France 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 Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halyk Bank and Air France.

Diversification Opportunities for Halyk Bank and Air France

-0.92

Correlation Coefficient

Halyk Bank  Air France

Pay attention - limited upside

The 3 months correlation between Halyk and Air is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Halyk Bank AO and Air France KLM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM 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 AO are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Halyk Bank i.e., Halyk Bank and Air France go up and down completely randomly.

Pair Corralation between Halyk Bank and Air France

Assuming the 90 days trading horizon Halyk Bank AO is expected to generate 0.45 times more return on investment than Air France. However, Halyk Bank AO is 2.2 times less risky than Air France. It trades about -0.11 of its potential returns per unit of risk. Air France KLM is currently generating about -0.13 per unit of risk. If you would invest  1,905  in Halyk Bank AO on January 28, 2024 and sell it today you would lose (43.00) from holding Halyk Bank AO or give up 2.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Halyk Bank AO  vs.  Air France KLM

Halyk Bank AO

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Halyk Bank AO are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Halyk Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Air France KLM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air France KLM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Halyk Bank and Air France

The main advantage of trading using opposite Halyk Bank and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halyk Bank position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.

The idea behind Halyk Bank AO and Air France KLM 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.