Correlation Between Halliburton and Mirgor SA

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

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

Diversification Opportunities for Halliburton and Mirgor SA

-0.09

Correlation Coefficient

Halliburton  Mirgor SA

Good diversification

The 3 months correlation between Halliburton and Mirgor is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton Co and Mirgor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirgor SA 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 Mirgor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirgor SA has no effect on the direction of Halliburton i.e., Halliburton and Mirgor SA go up and down completely randomly.

Pair Corralation between Halliburton and Mirgor SA

Assuming the 90 days trading horizon Halliburton Co is expected to generate 1.61 times more return on investment than Mirgor SA. However, Halliburton is 1.61 times more volatile than Mirgor SA. It trades about 0.08 of its potential returns per unit of risk. Mirgor SA is currently generating about 0.13 per unit of risk. If you would invest  1,587,500  in Halliburton Co on October 27, 2024 and sell it today you would earn a total of  47,500  from holding Halliburton Co or generate 2.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Halliburton Co  vs.  Mirgor SA

Halliburton

Risk-Adjusted Performance

1 of 100

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.

Mirgor SA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mirgor SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mirgor SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Halliburton and Mirgor SA

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

The idea behind Halliburton Co and Mirgor SA 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.