Correlation Between Daito Trust and Halliburton

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

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

Diversification Opportunities for Daito Trust and Halliburton

0.13

Correlation Coefficient

Daito Trust  Halliburton

Average diversification

The 3 months correlation between Daito and Halliburton is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Daito Trust Construction and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Daito Trust 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 Daito Trust Construction 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 Daito Trust i.e., Daito Trust and Halliburton go up and down completely randomly.

Pair Corralation between Daito Trust and Halliburton

Assuming the 90 days horizon Daito Trust Construction is expected to under-perform the Halliburton. But the stock apears to be less risky and, when comparing its historical volatility, Daito Trust Construction is 1.69 times less risky than Halliburton. The stock trades about -0.17 of its potential returns per unit of risk. The Halliburton is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  2,510  in Halliburton on October 24, 2024 and sell it today you would earn a total of  369.00  from holding Halliburton or generate 14.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Daito Trust Construction  vs.  Halliburton

Daito Trust Construction

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Daito Trust Construction are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Daito Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Halliburton

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Halliburton are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Halliburton unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Daito Trust and Halliburton

The main advantage of trading using opposite Daito Trust and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daito Trust 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 Daito Trust Construction 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.