Correlation Between Helmerich and Archer

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

By analyzing existing cross correlation between Helmerich and Payne and Archer Limited, you can compare the effects of market volatilities on Helmerich and Archer 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 Helmerich with a short position of Archer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helmerich and Archer.

Diversification Opportunities for Helmerich and Archer

-0.49

Correlation Coefficient

Helmerich  Archer

Very good diversification

The 3 months correlation between Helmerich and Archer is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Helmerich and Payne and Archer Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Limited and Helmerich 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 Helmerich and Payne are associated (or correlated) with Archer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Limited has no effect on the direction of Helmerich i.e., Helmerich and Archer go up and down completely randomly.

Pair Corralation between Helmerich and Archer

Allowing for the 90-day total investment horizon Helmerich and Payne is expected to generate 3.32 times more return on investment than Archer. However, Helmerich is 3.32 times more volatile than Archer Limited. It trades about 0.07 of its potential returns per unit of risk. Archer Limited is currently generating about -0.09 per unit of risk. If you would invest  3,066  in Helmerich and Payne on September 15, 2024 and sell it today you would earn a total of  293.00  from holding Helmerich and Payne or generate 9.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Helmerich and Payne  vs.  Archer Limited

Helmerich and Payne

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Helmerich and Payne are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Helmerich may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Archer Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Archer Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Archer is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Helmerich and Archer

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

The idea behind Helmerich and Payne and Archer Limited 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.