Correlation Between Halliburton and Agrometal SAI

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

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

Diversification Opportunities for Halliburton and Agrometal SAI

0.06

Correlation Coefficient

Halliburton  Agrometal SAI

Significant diversification

The 3 months correlation between Halliburton and Agrometal is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton Co and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI and Halliburton 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 Halliburton Co are associated (or correlated) with Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Halliburton i.e., Halliburton and Agrometal SAI go up and down completely randomly.

Pair Corralation between Halliburton and Agrometal SAI

Assuming the 90 days trading horizon Halliburton Co is expected to generate 0.61 times more return on investment than Agrometal SAI. However, Halliburton Co is 1.63 times less risky than Agrometal SAI. It trades about 0.02 of its potential returns per unit of risk. Agrometal SAI is currently generating about -0.11 per unit of risk. If you would invest  1,577,933  in Halliburton Co on December 25, 2024 and sell it today you would earn a total of  14,567  from holding Halliburton Co or generate 0.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Halliburton Co  vs.  Agrometal SAI

Halliburton

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Halliburton Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Halliburton is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Agrometal SAI

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agrometal SAI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Halliburton and Agrometal SAI

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

The idea behind Halliburton Co and Agrometal SAI 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.