Correlation Between Valaris and Halliburton
Can any of the company-specific risk be diversified away by investing in both Valaris 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 Valaris and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valaris and Halliburton, you can compare the effects of market volatilities on Valaris 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 Valaris with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valaris and Halliburton.
Diversification Opportunities for Valaris and Halliburton
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Valaris and Halliburton is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Valaris and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Valaris 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 Valaris 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 Valaris i.e., Valaris and Halliburton go up and down completely randomly.
Pair Corralation between Valaris and Halliburton
Considering the 90-day investment horizon Valaris is expected to under-perform the Halliburton. In addition to that, Valaris is 1.31 times more volatile than Halliburton. It trades about -0.16 of its total potential returns per unit of risk. Halliburton is currently generating about 0.12 per unit of volatility. If you would invest 2,905 in Halliburton on August 29, 2024 and sell it today you would earn a total of 276.00 from holding Halliburton or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valaris vs. Halliburton
Performance |
| Timeline |
| Valaris |
| Halliburton |
Valaris and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valaris and Halliburton
The main advantage of trading using opposite Valaris and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valaris 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.| Valaris vs. Weatherford International PLC | Valaris vs. TechnipFMC PLC | Valaris vs. Geospace Technologies | Valaris vs. Cactus Inc |
| 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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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