Correlation Between Halliburton and ChampionX

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

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

Diversification Opportunities for Halliburton and ChampionX

0.45

Correlation Coefficient

Halliburton  ChampionX

Very weak diversification

The 3 months correlation between Halliburton and ChampionX is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX 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 ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Halliburton i.e., Halliburton and ChampionX go up and down completely randomly.

Pair Corralation between Halliburton and ChampionX

Assuming the 90 days horizon Halliburton is expected to under-perform the ChampionX. But the stock apears to be less risky and, when comparing its historical volatility, Halliburton is 1.01 times less risky than ChampionX. The stock trades about -0.04 of its potential returns per unit of risk. The ChampionX is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,531  in ChampionX on December 29, 2024 and sell it today you would earn a total of  269.00  from holding ChampionX or generate 10.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Halliburton  vs.  ChampionX

Halliburton

Risk-Adjusted Performance

Very Weak

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

ChampionX

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ChampionX are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ChampionX may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Halliburton and ChampionX

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

The idea behind Halliburton and ChampionX 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.