Correlation Between Halliburton and Bristow
Can any of the company-specific risk be diversified away by investing in both Halliburton and Bristow 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 Bristow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halliburton and Bristow Group, you can compare the effects of market volatilities on Halliburton and Bristow 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 Bristow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and Bristow.
Diversification Opportunities for Halliburton and Bristow
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Halliburton and Bristow is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and Bristow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristow Group 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 Bristow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristow Group has no effect on the direction of Halliburton i.e., Halliburton and Bristow go up and down completely randomly.
Pair Corralation between Halliburton and Bristow
Considering the 90-day investment horizon Halliburton is expected to generate 27.45 times less return on investment than Bristow. But when comparing it to its historical volatility, Halliburton is 1.14 times less risky than Bristow. It trades about 0.0 of its potential returns per unit of risk. Bristow Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,558 in Bristow Group on August 27, 2024 and sell it today you would earn a total of 1,271 from holding Bristow Group or generate 49.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Halliburton vs. Bristow Group
Performance |
| Timeline |
| Halliburton |
| Bristow Group |
Halliburton and Bristow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halliburton and Bristow
The main advantage of trading using opposite Halliburton and Bristow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, Bristow 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 Bristow will offset losses from the drop in Bristow's long position.| Halliburton vs. Baker Hughes Co | Halliburton vs. NOV Inc | Halliburton vs. Tenaris SA ADR | Halliburton vs. Weatherford International PLC |
| Bristow vs. Oil States International | Bristow vs. Geospace Technologies | Bristow vs. Weatherford International PLC | Bristow vs. Enerflex |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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