Correlation Between Halliburton and Fiserv

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

Diversification Opportunities for Halliburton and Fiserv

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Halliburton and Fiserv is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and Fiserv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiserv Inc and Halliburton 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 Halliburton are associated (or correlated) with Fiserv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiserv Inc has no effect on the direction of Halliburton i.e., Halliburton and Fiserv go up and down completely randomly.

Pair Corralation between Halliburton and Fiserv

Considering the 90-day investment horizon Halliburton is expected to generate 5.26 times less return on investment than Fiserv. In addition to that, Halliburton is 1.68 times more volatile than Fiserv Inc. It trades about 0.02 of its total potential returns per unit of risk. Fiserv Inc is currently generating about 0.2 per unit of volatility. If you would invest  12,139  in Fiserv Inc on December 29, 2023 and sell it today you would earn a total of  3,843  from holding Fiserv Inc or generate 31.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Halliburton  vs.  Fiserv Inc

 Performance 
       Timeline  
Halliburton 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
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.
Fiserv Inc 

Risk-Adjusted Performance

28 of 100

 
Low
 
High
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv Inc are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile forward indicators, Fiserv demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Halliburton and Fiserv Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Halliburton and Fiserv

The main advantage of trading using opposite Halliburton and Fiserv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, Fiserv 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 Fiserv will offset losses from the drop in Fiserv's long position.
The idea behind Halliburton and Fiserv Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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