Correlation Between ConocoPhillips and Halliburton
Can any of the company-specific risk be diversified away by investing in both ConocoPhillips 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 ConocoPhillips and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConocoPhillips and Halliburton, you can compare the effects of market volatilities on ConocoPhillips 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 ConocoPhillips with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConocoPhillips and Halliburton.
Diversification Opportunities for ConocoPhillips and Halliburton
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ConocoPhillips and Halliburton is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding ConocoPhillips and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and ConocoPhillips 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 ConocoPhillips 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 ConocoPhillips i.e., ConocoPhillips and Halliburton go up and down completely randomly.
Pair Corralation between ConocoPhillips and Halliburton
Assuming the 90 days trading horizon ConocoPhillips is expected to generate 0.74 times more return on investment than Halliburton. However, ConocoPhillips is 1.36 times less risky than Halliburton. It trades about 0.02 of its potential returns per unit of risk. Halliburton is currently generating about -0.01 per unit of risk. If you would invest 203,277 in ConocoPhillips on September 25, 2024 and sell it today you would earn a total of 1,723 from holding ConocoPhillips or generate 0.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ConocoPhillips vs. Halliburton
Performance |
Timeline |
ConocoPhillips |
Halliburton |
ConocoPhillips and Halliburton Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ConocoPhillips and Halliburton
The main advantage of trading using opposite ConocoPhillips and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConocoPhillips 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.ConocoPhillips vs. FibraHotel | ConocoPhillips vs. Genworth Financial | ConocoPhillips vs. Costco Wholesale | ConocoPhillips vs. Verizon Communications |
Halliburton vs. Taiwan Semiconductor Manufacturing | Halliburton vs. Applied Materials | Halliburton vs. Grupo Carso SAB | Halliburton vs. Grupo Sports World |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |