Correlation Between UET United and Halliburton
Can any of the company-specific risk be diversified away by investing in both UET United and Halliburton 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 UET United and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UET United Electronic and Halliburton, you can compare the effects of market volatilities on UET United and Halliburton 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 UET United with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and Halliburton.
Diversification Opportunities for UET United and Halliburton
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UET and Halliburton is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and UET United 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 UET United Electronic are associated (or correlated) with Halliburton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halliburton has no effect on the direction of UET United i.e., UET United and Halliburton go up and down completely randomly.
Pair Corralation between UET United and Halliburton
Assuming the 90 days trading horizon UET United Electronic is expected to generate 1.99 times more return on investment than Halliburton. However, UET United is 1.99 times more volatile than Halliburton. It trades about 0.03 of its potential returns per unit of risk. Halliburton is currently generating about 0.0 per unit of risk. If you would invest 79.00 in UET United Electronic on September 3, 2024 and sell it today you would earn a total of 18.00 from holding UET United Electronic or generate 22.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.24% |
| Values | Daily Returns |
UET United Electronic vs. Halliburton
Performance |
| Timeline |
| UET United Electronic |
| Halliburton |
UET United and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and Halliburton
The main advantage of trading using opposite UET United and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, Halliburton 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 Halliburton will offset losses from the drop in Halliburton's long position.| UET United vs. Cisco Systems | UET United vs. Cisco Systems | UET United vs. Motorola Solutions | UET United vs. Nokia |
| Halliburton vs. Richardson Electronics | Halliburton vs. STORE ELECTRONIC | Halliburton vs. UET United Electronic | Halliburton vs. ELECTRONIC ARTS |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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