Correlation Between Halliburton and ChampionX
Can any of the company-specific risk be diversified away by investing in both Halliburton and ChampionX 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 ChampionX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halliburton and ChampionX, you can compare the effects of market volatilities on Halliburton and ChampionX 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 ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and ChampionX.
Diversification Opportunities for Halliburton and ChampionX
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Halliburton and ChampionX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX 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 ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Halliburton i.e., Halliburton and ChampionX go up and down completely randomly.
Pair Corralation between Halliburton and ChampionX
Considering the 90-day investment horizon Halliburton is expected to generate 0.86 times more return on investment than ChampionX. However, Halliburton is 1.17 times less risky than ChampionX. It trades about 0.32 of its potential returns per unit of risk. ChampionX is currently generating about 0.15 per unit of risk. If you would invest 2,789 in Halliburton on August 27, 2024 and sell it today you would earn a total of 405.00 from holding Halliburton or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Halliburton vs. ChampionX
Performance |
| Timeline |
| Halliburton |
| ChampionX |
Halliburton and ChampionX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halliburton and ChampionX
The main advantage of trading using opposite Halliburton and ChampionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, ChampionX 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 ChampionX will offset losses from the drop in ChampionX's long position.| Halliburton vs. Baker Hughes Co | Halliburton vs. NOV Inc | Halliburton vs. Tenaris SA ADR | Halliburton vs. Weatherford International PLC |
| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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