Correlation Between Halliburton and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both Halliburton and Grupo Hotelero 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 Grupo Hotelero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halliburton and Grupo Hotelero Santa, you can compare the effects of market volatilities on Halliburton and Grupo Hotelero 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 Grupo Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and Grupo Hotelero.
Diversification Opportunities for Halliburton and Grupo Hotelero
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Halliburton and Grupo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and Grupo Hotelero Santa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Hotelero Santa 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 Grupo Hotelero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Hotelero Santa has no effect on the direction of Halliburton i.e., Halliburton and Grupo Hotelero go up and down completely randomly.
Pair Corralation between Halliburton and Grupo Hotelero
Assuming the 90 days trading horizon Halliburton is expected to generate 3.86 times more return on investment than Grupo Hotelero. However, Halliburton is 3.86 times more volatile than Grupo Hotelero Santa. It trades about 0.14 of its potential returns per unit of risk. Grupo Hotelero Santa is currently generating about 0.18 per unit of risk. If you would invest 56,161 in Halliburton on September 2, 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 Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Halliburton vs. Grupo Hotelero Santa
Performance |
| Timeline |
| Halliburton |
| Grupo Hotelero Santa |
Halliburton and Grupo Hotelero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halliburton and Grupo Hotelero
The main advantage of trading using opposite Halliburton and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, Grupo Hotelero 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 Grupo Hotelero will offset losses from the drop in Grupo Hotelero's long position.The idea behind Halliburton and Grupo Hotelero Santa 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.| Grupo Hotelero vs. Capital One Financial | Grupo Hotelero vs. Lloyds Banking Group | Grupo Hotelero vs. McEwen Mining | Grupo Hotelero vs. Verizon Communications |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |