Correlation Between Cable One and Halliburton

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

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

Diversification Opportunities for Cable One and Halliburton

0.73

Correlation Coefficient

Cable One  Halliburton

Poor diversification

The 3 months correlation between Cable and Halliburton is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Cable One 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 Cable One 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 Cable One i.e., Cable One and Halliburton go up and down completely randomly.

Pair Corralation between Cable One and Halliburton

Assuming the 90 days trading horizon Cable One is expected to under-perform the Halliburton. In addition to that, Cable One is 1.39 times more volatile than Halliburton. It trades about -0.04 of its total potential returns per unit of risk. Halliburton is currently generating about 0.0 per unit of volatility. If you would invest  20,501  in Halliburton on October 4, 2024 and sell it today you would lose (3,263) from holding Halliburton or give up 15.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	68.43%
Values	Daily Returns

Cable One  vs.  Halliburton

Cable One

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cable One are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cable One sustained solid returns over the last few months and may actually be approaching a breakup point.

Halliburton

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Halliburton are ranked lower than 3 (%) 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 Cable One and Halliburton

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

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.