Correlation Between Baker Hughes and Schweiter Technologies

Can any of the company-specific risk be diversified away by investing in both Baker Hughes and Schweiter Technologies 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 Baker Hughes and Schweiter Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Baker Hughes Co and Schweiter Technologies AG, you can compare the effects of market volatilities on Baker Hughes and Schweiter Technologies 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 Baker Hughes with a short position of Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Hughes and Schweiter Technologies.

Diversification Opportunities for Baker Hughes and Schweiter Technologies

0.0

Correlation Coefficient

Baker Hughes  Schweiter Technologies

Pay attention - limited upside

The 3 months correlation between Baker and Schweiter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baker Hughes Co and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies and Baker Hughes 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 Baker Hughes Co are associated (or correlated) with Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Baker Hughes i.e., Baker Hughes and Schweiter Technologies go up and down completely randomly.

Pair Corralation between Baker Hughes and Schweiter Technologies

Assuming the 90 days trading horizon Baker Hughes Co is expected to generate 1.0 times more return on investment than Schweiter Technologies. However, Baker Hughes is 1.0 times more volatile than Schweiter Technologies AG. It trades about 0.09 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.04 per unit of risk. If you would invest  3,608  in Baker Hughes Co on September 24, 2024 and sell it today you would earn a total of  404.00  from holding Baker Hughes Co or generate 11.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Baker Hughes Co  vs.  Schweiter Technologies AG

Baker Hughes

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baker Hughes Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Baker Hughes may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Schweiter Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schweiter Technologies AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Schweiter Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Baker Hughes and Schweiter Technologies

The main advantage of trading using opposite Baker Hughes and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Hughes position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.

The idea behind Baker Hughes Co and Schweiter Technologies AG 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.