Correlation Between Baker Hughes and Halliburton

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Can any of the company-specific risk be diversified away by investing in both Baker Hughes and Halliburton 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 Baker Hughes and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Hughes and Halliburton, you can compare the effects of market volatilities on Baker Hughes and Halliburton 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 Baker Hughes with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Hughes and Halliburton.

Diversification Opportunities for Baker Hughes and Halliburton

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Baker and Halliburton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baker Hughes and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Baker Hughes 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 Baker Hughes are associated (or correlated) with Halliburton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halliburton has no effect on the direction of Baker Hughes i.e., Baker Hughes and Halliburton go up and down completely randomly.

Pair Corralation between Baker Hughes and Halliburton

If you would invest  3,864  in Halliburton on December 29, 2023 and sell it today you would earn a total of  19.00  from holding Halliburton or generate 0.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Baker Hughes  vs.  Halliburton

 Performance 
       Timeline  
Baker Hughes 

Risk-Adjusted Performance

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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 latest stock price confusion, may contribute to short-horizon losses for the traders.
Halliburton 

Risk-Adjusted Performance

7 of 100

 
Low
 
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OK
Compared to the overall equity markets, risk-adjusted returns on investments in Halliburton are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Halliburton may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Baker Hughes and Halliburton Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Baker Hughes and Halliburton

The main advantage of trading using opposite Baker Hughes and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Hughes position performs unexpectedly, Halliburton 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 Halliburton will offset losses from the drop in Halliburton's long position.
The idea behind Baker Hughes and Halliburton 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.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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