Correlation Between Halliburton and Valaris
Can any of the company-specific risk be diversified away by investing in both Halliburton and Valaris 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 Valaris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halliburton and Valaris, you can compare the effects of market volatilities on Halliburton and Valaris 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 Valaris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and Valaris.
Diversification Opportunities for Halliburton and Valaris
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Halliburton and Valaris is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and Valaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valaris 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 Valaris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valaris has no effect on the direction of Halliburton i.e., Halliburton and Valaris go up and down completely randomly.
Pair Corralation between Halliburton and Valaris
Considering the 90-day investment horizon Halliburton is expected to generate 0.84 times more return on investment than Valaris. However, Halliburton is 1.19 times less risky than Valaris. It trades about -0.06 of its potential returns per unit of risk. Valaris is currently generating about -0.12 per unit of risk. If you would invest 2,508 in Halliburton on January 18, 2025 and sell it today you would lose (255.00) from holding Halliburton or give up 10.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Halliburton vs. Valaris
Performance |
| Timeline |
| Halliburton |
| Valaris |
Halliburton and Valaris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halliburton and Valaris
The main advantage of trading using opposite Halliburton and Valaris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, Valaris 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 Valaris will offset losses from the drop in Valaris' long position.| Halliburton vs. Baker Hughes Co | Halliburton vs. NOV Inc | Halliburton vs. Tenaris SA ADR | Halliburton vs. Weatherford International PLC |
| Valaris vs. Weatherford International PLC | Valaris vs. TechnipFMC PLC | Valaris vs. Geospace Technologies | Valaris vs. Cactus Inc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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