Correlation Between Dril Quip and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Dril Quip 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 Dril Quip and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dril Quip and Baker Hughes Co, you can compare the effects of market volatilities on Dril Quip 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 Dril Quip with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dril Quip and Baker Hughes.
Diversification Opportunities for Dril Quip and Baker Hughes
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dril and Baker is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dril Quip and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and Dril Quip 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 Dril Quip 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 Dril Quip i.e., Dril Quip and Baker Hughes go up and down completely randomly.
Pair Corralation between Dril Quip and Baker Hughes
If you would invest 3,688 in Baker Hughes Co on August 30, 2024 and sell it today you would earn a total of 673.00 from holding Baker Hughes Co or generate 18.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Dril Quip vs. Baker Hughes Co
Performance |
| Timeline |
| Dril Quip |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Baker Hughes |
Dril Quip and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dril Quip and Baker Hughes
The main advantage of trading using opposite Dril Quip and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dril Quip 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.| Dril Quip vs. MRC Global | Dril Quip vs. NOV Inc | Dril Quip vs. Ranger Energy Services | Dril Quip vs. Helix Energy Solutions |
| Baker Hughes vs. Schlumberger NV | Baker Hughes vs. NOV Inc | Baker Hughes vs. Weatherford International PLC | Baker Hughes vs. Tenaris SA ADR |
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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