Correlation Between TGS ASA and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both TGS ASA 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 TGS ASA and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TGS ASA and Baker Hughes Co, you can compare the effects of market volatilities on TGS ASA 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 TGS ASA with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of TGS ASA and Baker Hughes.
Diversification Opportunities for TGS ASA and Baker Hughes
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TGS and Baker is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding TGS ASA and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and TGS ASA 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 TGS ASA 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 TGS ASA i.e., TGS ASA and Baker Hughes go up and down completely randomly.
Pair Corralation between TGS ASA and Baker Hughes
Assuming the 90 days horizon TGS ASA is expected to under-perform the Baker Hughes. In addition to that, TGS ASA is 1.82 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 0.04 per unit of volatility. If you would invest 3,341 in Baker Hughes Co on September 12, 2024 and sell it today you would earn a total of 780.00 from holding Baker Hughes Co or generate 23.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.94% |
| Values | Daily Returns |
TGS ASA vs. Baker Hughes Co
Performance |
| Timeline |
| TGS ASA |
| Baker Hughes |
TGS ASA and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TGS ASA and Baker Hughes
The main advantage of trading using opposite TGS ASA and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TGS ASA 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.| TGS ASA vs. Oceaneering International | TGS ASA vs. Nine Energy Service | TGS ASA vs. Schlumberger NV | TGS ASA vs. Calfrac Well Services |
| Baker Hughes vs. Schlumberger NV | Baker Hughes vs. Weatherford International PLC | Baker Hughes vs. Tenaris SA ADR | Baker Hughes vs. Halliburton |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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