Correlation Between Halliburton and Sociedad Comercial

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

By analyzing existing cross correlation between Halliburton Co and Sociedad Comercial del, you can compare the effects of market volatilities on Halliburton and Sociedad Comercial 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 Halliburton with a short position of Sociedad Comercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halliburton and Sociedad Comercial.

Diversification Opportunities for Halliburton and Sociedad Comercial

0.69

Correlation Coefficient

Halliburton  Sociedad Comercial

Poor diversification

The 3 months correlation between Halliburton and Sociedad is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton Co and Sociedad Comercial del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Comercial del and Halliburton 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 Halliburton Co are associated (or correlated) with Sociedad Comercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Comercial del has no effect on the direction of Halliburton i.e., Halliburton and Sociedad Comercial go up and down completely randomly.

Pair Corralation between Halliburton and Sociedad Comercial

Assuming the 90 days trading horizon Halliburton Co is expected to generate 0.97 times more return on investment than Sociedad Comercial. However, Halliburton Co is 1.03 times less risky than Sociedad Comercial. It trades about -0.07 of its potential returns per unit of risk. Sociedad Comercial del is currently generating about -0.07 per unit of risk. If you would invest  1,767,491  in Halliburton Co on September 15, 2024 and sell it today you would lose (207,491) from holding Halliburton Co or give up 11.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Halliburton Co  vs.  Sociedad Comercial del

Halliburton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Halliburton Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Sociedad Comercial del

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sociedad Comercial del has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Halliburton and Sociedad Comercial

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

The idea behind Halliburton Co and Sociedad Comercial del 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.