Correlation Between Visa and HALLIBURTON

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Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and HALLIBURTON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and HALLIBURTON 745 percent, you can compare the effects of market volatilities on Visa 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 Visa with a short position of HALLIBURTON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and HALLIBURTON.

Diversification Opportunities for Visa and HALLIBURTON

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Visa and HALLIBURTON is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and HALLIBURTON 745 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HALLIBURTON 745 percent and Visa 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 Visa Class A 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 745 percent has no effect on the direction of Visa i.e., Visa and HALLIBURTON go up and down completely randomly.

Pair Corralation between Visa and HALLIBURTON

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.65 times more return on investment than HALLIBURTON. However, Visa Class A is 1.54 times less risky than HALLIBURTON. It trades about 0.28 of its potential returns per unit of risk. HALLIBURTON 745 percent is currently generating about -0.05 per unit of risk. If you would invest  33,398  in Visa Class A on November 28, 2024 and sell it today you would earn a total of  1,665  from holding Visa Class A or generate 4.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy90.91%
ValuesDaily Returns

Visa Class A  vs.  HALLIBURTON 745 percent

 Performance 
       Timeline  
Visa Class A 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in March 2025.
HALLIBURTON 745 percent 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days HALLIBURTON 745 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HALLIBURTON is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Visa and HALLIBURTON Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Visa and HALLIBURTON

The main advantage of trading using opposite Visa and HALLIBURTON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.
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The idea behind Visa Class A and HALLIBURTON 745 percent pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Correlations module to find global opportunities by holding instruments from different markets.

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