Correlation Between Astar and Halliburton

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

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

Diversification Opportunities for Astar and Halliburton

0.59

Correlation Coefficient

Astar  Halliburton

Very weak diversification

The 3 months correlation between Astar and Halliburton is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Astar 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 Astar 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 Astar i.e., Astar and Halliburton go up and down completely randomly.

Pair Corralation between Astar and Halliburton

Assuming the 90 days trading horizon Astar is expected to generate 4.03 times more return on investment than Halliburton. However, Astar is 4.03 times more volatile than Halliburton. It trades about 0.03 of its potential returns per unit of risk. Halliburton is currently generating about 0.0 per unit of risk. If you would invest  5.70  in Astar on October 25, 2024 and sell it today you would lose (0.36) from holding Astar or give up 6.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	59.28%
Values	Daily Returns

Astar  vs.  Halliburton

Astar

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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. Despite somewhat uncertain essential indicators, Halliburton may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Astar and Halliburton

The main advantage of trading using opposite Astar and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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 Astar 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.