Correlation Between ProPetro Holding and Halliburton
Can any of the company-specific risk be diversified away by investing in both ProPetro Holding 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 ProPetro Holding and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProPetro Holding Corp and Halliburton, you can compare the effects of market volatilities on ProPetro Holding 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 ProPetro Holding with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPetro Holding and Halliburton.
Diversification Opportunities for ProPetro Holding and Halliburton
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProPetro and Halliburton is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ProPetro Holding Corp and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and ProPetro Holding 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 ProPetro Holding Corp 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 ProPetro Holding i.e., ProPetro Holding and Halliburton go up and down completely randomly.
Pair Corralation between ProPetro Holding and Halliburton
Given the investment horizon of 90 days ProPetro Holding Corp is expected to generate 1.6 times more return on investment than Halliburton. However, ProPetro Holding is 1.6 times more volatile than Halliburton. It trades about 0.0 of its potential returns per unit of risk. Halliburton is currently generating about -0.02 per unit of risk. If you would invest 936.00 in ProPetro Holding Corp on August 29, 2024 and sell it today you would lose (88.00) from holding ProPetro Holding Corp or give up 9.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProPetro Holding Corp vs. Halliburton
Performance |
| Timeline |
| ProPetro Holding Corp |
| Halliburton |
ProPetro Holding and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProPetro Holding and Halliburton
The main advantage of trading using opposite ProPetro Holding and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPetro Holding 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.| ProPetro Holding vs. Ranger Energy Services | ProPetro Holding vs. Newpark Resources | ProPetro Holding vs. RPC Inc | ProPetro Holding vs. Archrock |
| Halliburton vs. Baker Hughes Co | Halliburton vs. NOV Inc | Halliburton vs. Tenaris SA ADR | Halliburton vs. Weatherford International PLC |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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