Correlation Between Halliburton and Xiwang Special

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

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

Diversification Opportunities for Halliburton and Xiwang Special

0.0

Correlation Coefficient

Halliburton  Xiwang Special

Pay attention - limited upside

The 3 months correlation between Halliburton and Xiwang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and Xiwang Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Special Steel 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 are associated (or correlated) with Xiwang Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Special Steel has no effect on the direction of Halliburton i.e., Halliburton and Xiwang Special go up and down completely randomly.

Pair Corralation between Halliburton and Xiwang Special

If you would invest  2,577  in Halliburton on October 27, 2024 and sell it today you would earn a total of  97.00  from holding Halliburton or generate 3.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Halliburton  vs.  Xiwang Special Steel

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. In spite of rather sound essential indicators, Halliburton is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Xiwang Special Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiwang Special Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xiwang Special is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Halliburton and Xiwang Special

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

The idea behind Halliburton and Xiwang Special Steel 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.