Correlation Between Victory Energy and Halliburton
Can any of the company-specific risk be diversified away by investing in both Victory Energy 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 Victory Energy and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Energy Corp and Halliburton, you can compare the effects of market volatilities on Victory Energy 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 Victory Energy with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Energy and Halliburton.
Diversification Opportunities for Victory Energy and Halliburton
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Victory and Halliburton is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Victory Energy Corp and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Victory Energy 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 Victory Energy Corp 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 Victory Energy i.e., Victory Energy and Halliburton go up and down completely randomly.
Pair Corralation between Victory Energy and Halliburton
Given the investment horizon of 90 days Victory Energy Corp is expected to generate 120.55 times more return on investment than Halliburton. However, Victory Energy is 120.55 times more volatile than Halliburton. It trades about 0.24 of its potential returns per unit of risk. Halliburton is currently generating about 0.3 per unit of risk. If you would invest 55.00 in Victory Energy Corp on August 29, 2024 and sell it today you would lose (25.00) from holding Victory Energy Corp or give up 45.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Victory Energy Corp vs. Halliburton
Performance |
| Timeline |
| Victory Energy Corp |
| Halliburton |
Victory Energy and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Energy and Halliburton
The main advantage of trading using opposite Victory Energy and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Energy 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.| Victory Energy vs. Halliburton | Victory Energy vs. Petrofac Ltd ADR | Victory Energy vs. Akastor ASA | Victory Energy vs. Calfrac Well Services |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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