Correlation Between ChampionX and Baker Hughes

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

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

Diversification Opportunities for ChampionX and Baker Hughes

0.0

Correlation Coefficient

ChampionX  Baker Hughes

Pay attention - limited upside

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

Pair Corralation between ChampionX and Baker Hughes

If you would invest  0.00  in Baker Hughes Co on October 1, 2024 and sell it today you would earn a total of  0.00  from holding Baker Hughes Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

ChampionX  vs.  Baker Hughes Co

ChampionX

Risk-Adjusted Performance

0 of 100

Very Weak

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

Baker Hughes

Risk-Adjusted Performance

0 of 100

Good

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

Pair Trading with ChampionX and Baker Hughes

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

The idea behind ChampionX and Baker Hughes Co 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.