Correlation Between Baker Hughes and Las Vegas
Can any of the company-specific risk be diversified away by investing in both Baker Hughes and Las Vegas 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 Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Hughes Co and Las Vegas Sands, you can compare the effects of market volatilities on Baker Hughes and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Hughes and Las Vegas.
Diversification Opportunities for Baker Hughes and Las Vegas
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baker and Las is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Baker Hughes Co and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Co are associated (or correlated) with Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of Baker Hughes i.e., Baker Hughes and Las Vegas go up and down completely randomly.
Pair Corralation between Baker Hughes and Las Vegas
Assuming the 90 days trading horizon Baker Hughes Co is expected to generate 1.0 times more return on investment than Las Vegas. However, Baker Hughes is 1.0 times more volatile than Las Vegas Sands. It trades about 0.05 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.02 per unit of risk. If you would invest 2,765 in Baker Hughes Co on September 23, 2024 and sell it today you would earn a total of 1,247 from holding Baker Hughes Co or generate 45.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baker Hughes Co vs. Las Vegas Sands
Performance |
| Timeline |
| Baker Hughes |
| Las Vegas Sands |
Baker Hughes and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Hughes and Las Vegas
The main advantage of trading using opposite Baker Hughes and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Hughes position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' long position.| Baker Hughes vs. Southern Copper Corp | Baker Hughes vs. Endeavour Mining Corp | Baker Hughes vs. Metals Exploration Plc | Baker Hughes vs. AMG Advanced Metallurgical |
| Las Vegas vs. Uniper SE | Las Vegas vs. Mulberry Group PLC | Las Vegas vs. London Security Plc | Las Vegas vs. Triad Group PLC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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