Correlation Between Hoteles City and Halliburton
Can any of the company-specific risk be diversified away by investing in both Hoteles City and Halliburton 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 Hoteles City and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoteles City Express and Halliburton, you can compare the effects of market volatilities on Hoteles City and Halliburton 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 Hoteles City with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoteles City and Halliburton.
Diversification Opportunities for Hoteles City and Halliburton
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hoteles and Halliburton is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hoteles City Express and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Hoteles City 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 Hoteles City Express are associated (or correlated) with Halliburton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halliburton has no effect on the direction of Hoteles City i.e., Hoteles City and Halliburton go up and down completely randomly.
Pair Corralation between Hoteles City and Halliburton
Assuming the 90 days trading horizon Hoteles City Express is expected to under-perform the Halliburton. But the stock apears to be less risky and, when comparing its historical volatility, Hoteles City Express is 1.11 times less risky than Halliburton. The stock trades about -0.02 of its potential returns per unit of risk. The Halliburton is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 62,500 in Halliburton on September 14, 2024 and sell it today you would lose (4,200) from holding Halliburton or give up 6.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoteles City Express vs. Halliburton
Performance |
| Timeline |
| Hoteles City Express |
| Halliburton |
Hoteles City and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoteles City and Halliburton
The main advantage of trading using opposite Hoteles City and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoteles City position performs unexpectedly, Halliburton 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 Halliburton will offset losses from the drop in Halliburton's long position.| Hoteles City vs. Controladora Vuela Compaa | Hoteles City vs. Alsea SAB de | Hoteles City vs. Nemak S A | Hoteles City vs. Grupo Comercial Chedraui |
| Halliburton vs. Verizon Communications | Halliburton vs. Martin Marietta Materials | Halliburton vs. United States Steel | Halliburton vs. Grupo Carso SAB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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