Correlation Between Southern Copper and Halliburton
Can any of the company-specific risk be diversified away by investing in both Southern Copper 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 Southern Copper and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper and Halliburton, you can compare the effects of market volatilities on Southern Copper 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 Southern Copper with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Halliburton.
Diversification Opportunities for Southern Copper and Halliburton
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southern and Halliburton is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Southern Copper 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 Southern Copper 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 Southern Copper i.e., Southern Copper and Halliburton go up and down completely randomly.
Pair Corralation between Southern Copper and Halliburton
Assuming the 90 days trading horizon Southern Copper is expected to under-perform the Halliburton. But the stock apears to be less risky and, when comparing its historical volatility, Southern Copper is 2.0 times less risky than Halliburton. The stock trades about -0.2 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 | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Southern Copper vs. Halliburton
Performance |
| Timeline |
| Southern Copper |
| Halliburton |
Southern Copper and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Halliburton
The main advantage of trading using opposite Southern Copper and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper 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.| Southern Copper vs. Deutsche Bank Aktiengesellschaft | Southern Copper vs. FIBRA Storage | Southern Copper vs. McEwen Mining | Southern Copper vs. Ross Stores |
| 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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