Correlation Between Halliburton and Transportadora
Can any of the company-specific risk be diversified away by investing in both Halliburton and Transportadora 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 Halliburton and Transportadora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halliburton Co and Transportadora de Gas, you can compare the effects of market volatilities on Halliburton and Transportadora 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 Halliburton with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and Transportadora.
Diversification Opportunities for Halliburton and Transportadora
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Halliburton and Transportadora is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton Co and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas and Halliburton 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 Halliburton Co are associated (or correlated) with Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Halliburton i.e., Halliburton and Transportadora go up and down completely randomly.
Pair Corralation between Halliburton and Transportadora
Assuming the 90 days trading horizon Halliburton is expected to generate 14.13 times less return on investment than Transportadora. But when comparing it to its historical volatility, Halliburton Co is 1.45 times less risky than Transportadora. It trades about 0.01 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 289,630 in Transportadora de Gas on September 4, 2024 and sell it today you would earn a total of 364,370 from holding Transportadora de Gas or generate 125.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Halliburton Co vs. Transportadora de Gas
Performance |
| Timeline |
| Halliburton |
| Transportadora de Gas |
Halliburton and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halliburton and Transportadora
The main advantage of trading using opposite Halliburton and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| Halliburton vs. Transportadora de Gas | Halliburton vs. Telecom Argentina | Halliburton vs. Agrometal SAI | Halliburton vs. Harmony Gold Mining |
| Transportadora vs. Longvie SA | Transportadora vs. United States Steel | Transportadora vs. Capex SA | Transportadora vs. Pfizer Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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