Correlation Between US Silica and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both US Silica and Baker Hughes 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 US Silica and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Silica Holdings and Baker Hughes Co, you can compare the effects of market volatilities on US Silica and Baker Hughes 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 US Silica with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Silica and Baker Hughes.
Diversification Opportunities for US Silica and Baker Hughes
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between SLCA and Baker is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding US Silica Holdings and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and US Silica 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 US Silica Holdings are associated (or correlated) with Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of US Silica i.e., US Silica and Baker Hughes go up and down completely randomly.
Pair Corralation between US Silica and Baker Hughes
Given the investment horizon of 90 days US Silica Holdings is expected to under-perform the Baker Hughes. In addition to that, US Silica is 3.22 times more volatile than Baker Hughes Co. It trades about -0.03 of its total potential returns per unit of risk. Baker Hughes Co is currently generating about 0.07 per unit of volatility. If you would invest 2,679 in Baker Hughes Co on September 2, 2024 and sell it today you would earn a total of 1,716 from holding Baker Hughes Co or generate 64.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.86% |
| Values | Daily Returns |
US Silica Holdings vs. Baker Hughes Co
Performance |
| Timeline |
| US Silica Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Baker Hughes |
US Silica and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Silica and Baker Hughes
The main advantage of trading using opposite US Silica and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Silica position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| US Silica vs. Newpark Resources | US Silica vs. North American Construction | US Silica vs. ProPetro Holding Corp | US Silica vs. Ranger Energy Services |
| Baker Hughes vs. Schlumberger NV | Baker Hughes vs. NOV Inc | Baker Hughes vs. Weatherford International PLC | Baker Hughes vs. Tenaris SA ADR |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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