Correlation Between Baker Hughes and RPC
Can any of the company-specific risk be diversified away by investing in both Baker Hughes and RPC 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 RPC 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 RPC Inc, you can compare the effects of market volatilities on Baker Hughes and RPC 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 RPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Hughes and RPC.
Diversification Opportunities for Baker Hughes and RPC
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baker and RPC is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Baker Hughes Co and RPC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPC Inc 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 RPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPC Inc has no effect on the direction of Baker Hughes i.e., Baker Hughes and RPC go up and down completely randomly.
Pair Corralation between Baker Hughes and RPC
Considering the 90-day investment horizon Baker Hughes Co is expected to generate 0.64 times more return on investment than RPC. However, Baker Hughes Co is 1.56 times less risky than RPC. It trades about 0.15 of its potential returns per unit of risk. RPC Inc is currently generating about -0.01 per unit of risk. If you would invest 3,203 in Baker Hughes Co on August 24, 2024 and sell it today you would earn a total of 1,285 from holding Baker Hughes Co or generate 40.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baker Hughes Co vs. RPC Inc
Performance |
| Timeline |
| Baker Hughes |
| RPC Inc |
Baker Hughes and RPC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Hughes and RPC
The main advantage of trading using opposite Baker Hughes and RPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Hughes position performs unexpectedly, RPC 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 RPC will offset losses from the drop in RPC's long position.| Baker Hughes vs. Bristow Group | Baker Hughes vs. RPC Inc | Baker Hughes vs. NOV Inc | Baker Hughes vs. Oceaneering International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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