Correlation Between Metrogas and Halliburton
Can any of the company-specific risk be diversified away by investing in both Metrogas 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 Metrogas and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrogas SA and Halliburton Co, you can compare the effects of market volatilities on Metrogas 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 Metrogas with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrogas and Halliburton.
Diversification Opportunities for Metrogas and Halliburton
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metrogas and Halliburton is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Metrogas SA and Halliburton Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Metrogas 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 Metrogas SA 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 Metrogas i.e., Metrogas and Halliburton go up and down completely randomly.
Pair Corralation between Metrogas and Halliburton
Assuming the 90 days trading horizon Metrogas SA is expected to generate 1.16 times more return on investment than Halliburton. However, Metrogas is 1.16 times more volatile than Halliburton Co. It trades about 0.83 of its potential returns per unit of risk. Halliburton Co is currently generating about 0.11 per unit of risk. If you would invest 155,000 in Metrogas SA on September 5, 2024 and sell it today you would earn a total of 122,000 from holding Metrogas SA or generate 78.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metrogas SA vs. Halliburton Co
Performance |
| Timeline |
| Metrogas SA |
| Halliburton |
Metrogas and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrogas and Halliburton
The main advantage of trading using opposite Metrogas and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrogas 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.| Metrogas vs. Telecom Argentina | Metrogas vs. Harmony Gold Mining | Metrogas vs. Compania de Transporte | Metrogas vs. Transportadora de Gas |
| Halliburton vs. Camuzzi Gas Pampeana | Halliburton vs. Metrogas SA | Halliburton vs. American Express Co | Halliburton vs. QUALCOMM Incorporated |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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