Correlation Between Schroders Investment and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Schroders Investment 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 Schroders Investment and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schroders Investment Trusts and Baker Hughes Co, you can compare the effects of market volatilities on Schroders Investment 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 Schroders Investment with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schroders Investment and Baker Hughes.
Diversification Opportunities for Schroders Investment and Baker Hughes
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Schroders and Baker is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Schroders Investment Trusts and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and Schroders Investment 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 Schroders Investment Trusts 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 Schroders Investment i.e., Schroders Investment and Baker Hughes go up and down completely randomly.
Pair Corralation between Schroders Investment and Baker Hughes
Assuming the 90 days trading horizon Schroders Investment is expected to generate 52.16 times less return on investment than Baker Hughes. But when comparing it to its historical volatility, Schroders Investment Trusts is 4.18 times less risky than Baker Hughes. It trades about 0.02 of its potential returns per unit of risk. Baker Hughes Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,825 in Baker Hughes Co on September 4, 2024 and sell it today you would earn a total of 510.00 from holding Baker Hughes Co or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schroders Investment Trusts vs. Baker Hughes Co
Performance |
| Timeline |
| Schroders Investment |
| Baker Hughes |
Schroders Investment and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schroders Investment and Baker Hughes
The main advantage of trading using opposite Schroders Investment and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schroders Investment 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.| Schroders Investment vs. SupplyMe Capital PLC | Schroders Investment vs. Lloyds Banking Group | Schroders Investment vs. Premier African Minerals | Schroders Investment vs. SANTANDER UK 8 |
| Baker Hughes vs. Samsung Electronics Co | Baker Hughes vs. Samsung Electronics Co | Baker Hughes vs. Hyundai Motor | Baker Hughes vs. Toyota Motor Corp |
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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