Correlation Between Halliburton and Total Energy
Can any of the company-specific risk be diversified away by investing in both Halliburton and Total Energy 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 Total Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halliburton and Total Energy Services, you can compare the effects of market volatilities on Halliburton and Total Energy 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 Total Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and Total Energy.
Diversification Opportunities for Halliburton and Total Energy
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Halliburton and Total is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and Total Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Energy Services 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 Total Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Energy Services has no effect on the direction of Halliburton i.e., Halliburton and Total Energy go up and down completely randomly.
Pair Corralation between Halliburton and Total Energy
Considering the 90-day investment horizon Halliburton is expected to generate 1.14 times more return on investment than Total Energy. However, Halliburton is 1.14 times more volatile than Total Energy Services. It trades about -0.01 of its potential returns per unit of risk. Total Energy Services is currently generating about -0.38 per unit of risk. If you would invest 2,654 in Halliburton on December 1, 2024 and sell it today you would lose (17.00) from holding Halliburton or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Halliburton vs. Total Energy Services
Performance |
| Timeline |
| Halliburton |
| Total Energy Services |
Halliburton and Total Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halliburton and Total Energy
The main advantage of trading using opposite Halliburton and Total Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, Total Energy 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 Total Energy will offset losses from the drop in Total Energy's long position.| Halliburton vs. Baker Hughes Co | Halliburton vs. NOV Inc | Halliburton vs. Tenaris SA ADR | Halliburton vs. Weatherford International PLC |
| Total Energy vs. Source Energy Services | Total Energy vs. Trican Well Service | Total Energy vs. STEP Energy Services | Total Energy vs. Koil Energy Solutions |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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