Correlation Between IPC MEXICO and Halliburton
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO 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 IPC MEXICO and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPC MEXICO and Halliburton, you can compare the effects of market volatilities on IPC MEXICO 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 IPC MEXICO with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and Halliburton.
Diversification Opportunities for IPC MEXICO and Halliburton
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPC and Halliburton is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and IPC MEXICO 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 IPC MEXICO 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 IPC MEXICO i.e., IPC MEXICO and Halliburton go up and down completely randomly.
Pair Corralation between IPC MEXICO and Halliburton
Assuming the 90 days trading horizon IPC MEXICO is expected to under-perform the Halliburton. But the index apears to be less risky and, when comparing its historical volatility, IPC MEXICO is 4.18 times less risky than Halliburton. The index trades about -0.1 of its potential returns per unit of risk. The Halliburton is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 56,161 in Halliburton on August 31, 2024 and sell it today you would earn a total of 4,839 from holding Halliburton or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPC MEXICO vs. Halliburton
Performance |
| Timeline |
IPC MEXICO and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
Halliburton
Pair trading matchups for Halliburton
Pair Trading with IPC MEXICO and Halliburton
The main advantage of trading using opposite IPC MEXICO and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO 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.| IPC MEXICO vs. Genworth Financial | IPC MEXICO vs. Cognizant Technology Solutions | IPC MEXICO vs. CVS Health | IPC MEXICO vs. First Republic Bank |
| Halliburton vs. GMxico Transportes SAB | Halliburton vs. Deutsche Bank Aktiengesellschaft | Halliburton vs. Southern Copper | Halliburton vs. Genworth Financial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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