Correlation Between Baker Hughes and Profire Ene
Can any of the company-specific risk be diversified away by investing in both Baker Hughes and Profire Ene 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 Profire Ene 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 Profire Ene, you can compare the effects of market volatilities on Baker Hughes and Profire Ene 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 Profire Ene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Hughes and Profire Ene.
Diversification Opportunities for Baker Hughes and Profire Ene
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baker and Profire is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Baker Hughes Co and Profire Ene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profire Ene 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 Profire Ene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profire Ene has no effect on the direction of Baker Hughes i.e., Baker Hughes and Profire Ene go up and down completely randomly.
Pair Corralation between Baker Hughes and Profire Ene
Considering the 90-day investment horizon Baker Hughes is expected to generate 2.77 times less return on investment than Profire Ene. But when comparing it to its historical volatility, Baker Hughes Co is 2.7 times less risky than Profire Ene. It trades about 0.06 of its potential returns per unit of risk. Profire Ene is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 105.00 in Profire Ene on August 28, 2024 and sell it today you would earn a total of 147.00 from holding Profire Ene or generate 140.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Baker Hughes Co vs. Profire Ene
Performance |
| Timeline |
| Baker Hughes |
| Profire Ene |
Baker Hughes and Profire Ene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Hughes and Profire Ene
The main advantage of trading using opposite Baker Hughes and Profire Ene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Hughes position performs unexpectedly, Profire Ene 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 Profire Ene will offset losses from the drop in Profire Ene's long position.| Baker Hughes vs. Schlumberger NV | Baker Hughes vs. NOV Inc | Baker Hughes vs. Weatherford International PLC | Baker Hughes vs. Tenaris SA ADR |
| Profire Ene vs. Enservco Co | Profire Ene vs. Nine Energy Service | Profire Ene vs. Enerflex | Profire Ene vs. Geospace Technologies |
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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