Correlation Between Weatherford International and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Weatherford International and Baker Hughes 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 Weatherford International and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weatherford International Plc and Baker Hughes, you can compare the effects of market volatilities on Weatherford International and Baker Hughes 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 Weatherford International with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weatherford International and Baker Hughes.
Diversification Opportunities for Weatherford International and Baker Hughes
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Weatherford and Baker is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weatherford International Plc and Baker Hughes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and Weatherford International 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 Weatherford International Plc are associated (or correlated) with Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of Weatherford International i.e., Weatherford International and Baker Hughes go up and down completely randomly.
Pair Corralation between Weatherford International and Baker Hughes
If you would invest (100.00) in Baker Hughes on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Baker Hughes or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Weatherford International Plc vs. Baker Hughes
Performance |
Timeline |
Weatherford International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Baker Hughes |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Weatherford International and Baker Hughes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Weatherford International and Baker Hughes
The main advantage of trading using opposite Weatherford International and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weatherford International position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.Weatherford International vs. Sonos Inc | Weatherford International vs. United Parks Resorts | Weatherford International vs. PGE Corp | Weatherford International vs. Brunswick |
Baker Hughes vs. Cedar Fair LP | Baker Hughes vs. Semtech | Baker Hughes vs. Arrow Electronics | Baker Hughes vs. ScanSource |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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