Correlation Between Halliburton and Schlumberger
Can any of the company-specific risk be diversified away by investing in both Halliburton and Schlumberger 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 Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halliburton and Schlumberger Limited, you can compare the effects of market volatilities on Halliburton and Schlumberger 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 Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and Schlumberger.
Diversification Opportunities for Halliburton and Schlumberger
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Halliburton and Schlumberger is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and Schlumberger Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger Limited 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 Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger Limited has no effect on the direction of Halliburton i.e., Halliburton and Schlumberger go up and down completely randomly.
Pair Corralation between Halliburton and Schlumberger
Assuming the 90 days trading horizon Halliburton is expected to generate 1.1 times more return on investment than Schlumberger. However, Halliburton is 1.1 times more volatile than Schlumberger Limited. It trades about 0.01 of its potential returns per unit of risk. Schlumberger Limited is currently generating about 0.0 per unit of risk. If you would invest 3,110 in Halliburton on September 2, 2024 and sell it today you would lose (92.00) from holding Halliburton or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.25% |
| Values | Daily Returns |
Halliburton vs. Schlumberger Limited
Performance |
| Timeline |
| Halliburton |
| Schlumberger Limited |
Halliburton and Schlumberger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halliburton and Schlumberger
The main advantage of trading using opposite Halliburton and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, Schlumberger 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 Schlumberger will offset losses from the drop in Schlumberger's long position.| Halliburton vs. Superior Plus Corp | Halliburton vs. NMI Holdings | Halliburton vs. Origin Agritech | Halliburton vs. SIVERS SEMICONDUCTORS AB |
| Schlumberger vs. Superior Plus Corp | Schlumberger vs. NMI Holdings | Schlumberger vs. Origin Agritech | Schlumberger vs. SIVERS SEMICONDUCTORS AB |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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