Correlation Between GMxico Transportes and Halliburton
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes 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 GMxico Transportes and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and Halliburton, you can compare the effects of market volatilities on GMxico Transportes 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 GMxico Transportes with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Halliburton.
Diversification Opportunities for GMxico Transportes and Halliburton
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GMxico and Halliburton is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and GMxico Transportes 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 GMxico Transportes SAB 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 GMxico Transportes i.e., GMxico Transportes and Halliburton go up and down completely randomly.
Pair Corralation between GMxico Transportes and Halliburton
Assuming the 90 days trading horizon GMxico Transportes is expected to generate 1.41 times less return on investment than Halliburton. But when comparing it to its historical volatility, GMxico Transportes SAB is 1.76 times less risky than Halliburton. It trades about 0.17 of its potential returns per unit of risk. Halliburton is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 56,161 in Halliburton on August 31, 2024 and sell it today you would earn a total of 4,839 from holding Halliburton or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GMxico Transportes SAB vs. Halliburton
Performance |
| Timeline |
| GMxico Transportes SAB |
| Halliburton |
GMxico Transportes and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMxico Transportes and Halliburton
The main advantage of trading using opposite GMxico Transportes and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes 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.| GMxico Transportes vs. Grupo Mxico SAB | GMxico Transportes vs. The Select Sector | GMxico Transportes vs. Promotora y Operadora | GMxico Transportes vs. SPDR Series Trust |
| Halliburton vs. GMxico Transportes SAB | Halliburton vs. Deutsche Bank Aktiengesellschaft | Halliburton vs. Southern Copper | Halliburton vs. Genworth Financial |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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