Correlation Between Baker Hughes and Tidewater
Can any of the company-specific risk be diversified away by investing in both Baker Hughes and Tidewater 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 Tidewater 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 Tidewater, you can compare the effects of market volatilities on Baker Hughes and Tidewater 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 Tidewater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Hughes and Tidewater.
Diversification Opportunities for Baker Hughes and Tidewater
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baker and Tidewater is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Baker Hughes Co and Tidewater in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidewater 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 Tidewater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidewater has no effect on the direction of Baker Hughes i.e., Baker Hughes and Tidewater go up and down completely randomly.
Pair Corralation between Baker Hughes and Tidewater
Considering the 90-day investment horizon Baker Hughes Co is expected to generate 0.56 times more return on investment than Tidewater. However, Baker Hughes Co is 1.8 times less risky than Tidewater. It trades about 0.13 of its potential returns per unit of risk. Tidewater is currently generating about -0.02 per unit of risk. If you would invest 2,778 in Baker Hughes Co on August 28, 2024 and sell it today you would earn a total of 1,577 from holding Baker Hughes Co or generate 56.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baker Hughes Co vs. Tidewater
Performance |
| Timeline |
| Baker Hughes |
| Tidewater |
Baker Hughes and Tidewater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Hughes and Tidewater
The main advantage of trading using opposite Baker Hughes and Tidewater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Hughes position performs unexpectedly, Tidewater 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 Tidewater will offset losses from the drop in Tidewater'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 |
| Tidewater vs. Weatherford International PLC | Tidewater vs. NOV Inc | Tidewater vs. Liberty Oilfield Services | Tidewater vs. TechnipFMC 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 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.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |