Correlation Between Halliburton and Itasa Investimentos

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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

HalliburtonItasaDiversified AwayHalliburtonItasaDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Halliburton  vs.  Itasa Investimentos

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50510
JavaScript chart by amCharts 3.21.15HALI34 ITSA4
       Timeline  
Halliburton 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Halliburton has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb150160170180190
Itasa Investimentos 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Itasa Investimentos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Itasa Investimentos is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8.48.68.899.29.49.69.8

Halliburton and Itasa Investimentos Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.33-3.99-2.65-1.32-0.02231.242.523.85.086.37 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15HALI34 ITSA4
       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.
The idea behind Halliburton and Itasa Investimentos pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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