Correlation Between Grupo Sports and Halliburton

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

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

Diversification Opportunities for Grupo Sports and Halliburton

0.31

Correlation Coefficient

Grupo Sports  Halliburton

Weak diversification

The 3 months correlation between Grupo and Halliburton is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Grupo Sports 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 Grupo Sports World 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 Grupo Sports i.e., Grupo Sports and Halliburton go up and down completely randomly.

Pair Corralation between Grupo Sports and Halliburton

Assuming the 90 days trading horizon Grupo Sports World is expected to generate 0.86 times more return on investment than Halliburton. However, Grupo Sports World is 1.16 times less risky than Halliburton. It trades about 0.09 of its potential returns per unit of risk. Halliburton is currently generating about -0.01 per unit of risk. If you would invest  285.00  in Grupo Sports World on September 24, 2024 and sell it today you would earn a total of  353.00  from holding Grupo Sports World or generate 123.86% return on investment over 90 days.

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

Grupo Sports World  vs.  Halliburton

Grupo Sports World

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Sports World are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Sports sustained solid returns over the last few months and may actually be approaching a breakup point.

Halliburton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Halliburton has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of 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.

Pair Trading with Grupo Sports and Halliburton

The main advantage of trading using opposite Grupo Sports and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports 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.

The idea behind Grupo Sports World and Halliburton 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.