Correlation Between Mxima Renda and Halliburton

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

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

Diversification Opportunities for Mxima Renda and Halliburton

-0.43

Correlation Coefficient

Mxima Renda  Halliburton

Very good diversification

The 3 months correlation between Mxima and Halliburton is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mxima Renda Corporativa and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Mxima Renda 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 Mxima Renda Corporativa 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 Mxima Renda i.e., Mxima Renda and Halliburton go up and down completely randomly.

Pair Corralation between Mxima Renda and Halliburton

Assuming the 90 days trading horizon Mxima Renda Corporativa is expected to under-perform the Halliburton. In addition to that, Mxima Renda is 1.14 times more volatile than Halliburton. It trades about -0.03 of its total potential returns per unit of risk. Halliburton is currently generating about 0.0 per unit of volatility. If you would invest  20,345  in Halliburton on October 20, 2024 and sell it today you would lose (2,145) from holding Halliburton or give up 10.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.39%
Values	Daily Returns

Mxima Renda Corporativa  vs.  Halliburton

Mxima Renda Corporativa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mxima Renda Corporativa has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Mxima Renda is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Halliburton

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Halliburton are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Halliburton sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mxima Renda and Halliburton

The main advantage of trading using opposite Mxima Renda and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mxima Renda 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 Mxima Renda Corporativa 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..