Correlation Between Tyson Foods and Baker Hughes

Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tyson Foods and Baker Hughes, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Baker Hughes.

Diversification Opportunities for Tyson Foods and Baker Hughes

0.0

Correlation Coefficient

Tyson Foods  Baker Hughes

Pay attention - limited upside

The 3 months correlation between Tyson and Baker is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Baker Hughes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Baker Hughes go up and down completely randomly.

Pair Corralation between Tyson Foods and Baker Hughes

If you would invest  5,340  in Tyson Foods on February 28, 2024 and sell it today you would earn a total of  631.00  from holding Tyson Foods or generate 11.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Tyson Foods  vs.  Baker Hughes

Tyson Foods

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tyson Foods are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tyson Foods may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Baker Hughes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baker Hughes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Baker Hughes is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Tyson Foods and Baker Hughes

The main advantage of trading using opposite Tyson Foods and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.

The idea behind Tyson Foods and Baker Hughes 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.