Correlation Between Halliburton and GMxico Transportes
Can any of the company-specific risk be diversified away by investing in both Halliburton and GMxico Transportes 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 GMxico Transportes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halliburton and GMxico Transportes SAB, you can compare the effects of market volatilities on Halliburton and GMxico Transportes 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 GMxico Transportes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and GMxico Transportes.
Diversification Opportunities for Halliburton and GMxico Transportes
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Halliburton and GMxico is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and GMxico Transportes SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMxico Transportes SAB 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 are associated (or correlated) with GMxico Transportes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMxico Transportes SAB has no effect on the direction of Halliburton i.e., Halliburton and GMxico Transportes go up and down completely randomly.
Pair Corralation between Halliburton and GMxico Transportes
Assuming the 90 days trading horizon Halliburton is expected to generate 1.49 times more return on investment than GMxico Transportes. However, Halliburton is 1.49 times more volatile than GMxico Transportes SAB. It trades about 0.01 of its potential returns per unit of risk. GMxico Transportes SAB is currently generating about -0.01 per unit of risk. If you would invest 65,922 in Halliburton on September 2, 2024 and sell it today you would lose (4,922) from holding Halliburton or give up 7.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Halliburton vs. GMxico Transportes SAB
Performance |
| Timeline |
| Halliburton |
| GMxico Transportes SAB |
Halliburton and GMxico Transportes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halliburton and GMxico Transportes
The main advantage of trading using opposite Halliburton and GMxico Transportes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, GMxico Transportes 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 GMxico Transportes will offset losses from the drop in GMxico Transportes' long position.The idea behind Halliburton and GMxico Transportes SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GMxico Transportes vs. Grupo Sports World | GMxico Transportes vs. Monster Beverage Corp | GMxico Transportes vs. Deutsche Bank Aktiengesellschaft | GMxico Transportes vs. United States Steel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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