Correlation Between North American and Helix Energy
Can any of the company-specific risk be diversified away by investing in both North American and Helix Energy 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 North American and Helix Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Construction and Helix Energy Solutions, you can compare the effects of market volatilities on North American and Helix Energy 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 North American with a short position of Helix Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Helix Energy.
Diversification Opportunities for North American and Helix Energy
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between North and Helix is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction and Helix Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helix Energy Solutions and North American 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 North American Construction are associated (or correlated) with Helix Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helix Energy Solutions has no effect on the direction of North American i.e., North American and Helix Energy go up and down completely randomly.
Pair Corralation between North American and Helix Energy
Considering the 90-day investment horizon North American Construction is expected to generate 1.26 times more return on investment than Helix Energy. However, North American is 1.26 times more volatile than Helix Energy Solutions. It trades about 0.25 of its potential returns per unit of risk. Helix Energy Solutions is currently generating about 0.28 per unit of risk. If you would invest 1,701 in North American Construction on August 27, 2024 and sell it today you would earn a total of 303.00 from holding North American Construction or generate 17.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Construction vs. Helix Energy Solutions
Performance |
| Timeline |
| North American Const |
| Helix Energy Solutions |
North American and Helix Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Helix Energy
The main advantage of trading using opposite North American and Helix Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Helix Energy 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 Helix Energy will offset losses from the drop in Helix Energy's long position.| North American vs. ProPetro Holding Corp | North American vs. RPC Inc | North American vs. MRC Global | North American vs. Expro Group Holdings |
| Helix Energy vs. Oceaneering International | Helix Energy vs. Newpark Resources | Helix Energy vs. RPC Inc | Helix Energy vs. Oil States International |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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