Correlation Between Halliburton and Itasa Investimentos
Can any of the company-specific risk be diversified away by investing in both Halliburton and Itasa Investimentos 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 Itasa Investimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halliburton and Itasa Investimentos, you can compare the effects of market volatilities on Halliburton and Itasa Investimentos 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 Itasa Investimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and Itasa Investimentos.
Diversification Opportunities for Halliburton and Itasa Investimentos
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Halliburton and Itasa is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and Itasa Investimentos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itasa Investimentos 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 Itasa Investimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itasa Investimentos has no effect on the direction of Halliburton i.e., Halliburton and Itasa Investimentos go up and down completely randomly.
Pair Corralation between Halliburton and Itasa Investimentos
Assuming the 90 days trading horizon Halliburton is expected to under-perform the Itasa Investimentos. In addition to that, Halliburton is 1.55 times more volatile than Itasa Investimentos. It trades about -0.02 of its total potential returns per unit of risk. Itasa Investimentos is currently generating about 0.08 per unit of volatility. If you would invest 868.00 in Itasa Investimentos on November 23, 2024 and sell it today you would earn a total of 41.00 from holding Itasa Investimentos or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Halliburton vs. Itasa Investimentos
Performance |
| Timeline |
| Halliburton |
| Itasa Investimentos |
Halliburton and Itasa Investimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halliburton and Itasa Investimentos
The main advantage of trading using opposite Halliburton and Itasa Investimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, Itasa Investimentos 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 Itasa Investimentos will offset losses from the drop in Itasa Investimentos' long position.| Halliburton vs. Baker Hughes | ||
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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