Correlation Between Helix Energy and NOV

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

By analyzing existing cross correlation between Helix Energy Solutions and NOV Inc, you can compare the effects of market volatilities on Helix Energy and NOV 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 Helix Energy with a short position of NOV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helix Energy and NOV.

Diversification Opportunities for Helix Energy and NOV

0.14

Correlation Coefficient

Helix Energy  NOV

Average diversification

The 3 months correlation between Helix and NOV is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Helix Energy Solutions and NOV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOV Inc and Helix Energy 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 Helix Energy Solutions are associated (or correlated) with NOV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOV Inc has no effect on the direction of Helix Energy i.e., Helix Energy and NOV go up and down completely randomly.

Pair Corralation between Helix Energy and NOV

Considering the 90-day investment horizon Helix Energy Solutions is expected to under-perform the NOV. In addition to that, Helix Energy is 1.05 times more volatile than NOV Inc. It trades about -0.02 of its total potential returns per unit of risk. NOV Inc is currently generating about 0.06 per unit of volatility. If you would invest  1,435  in NOV Inc on December 26, 2024 and sell it today you would earn a total of  108.00  from holding NOV Inc or generate 7.53% return on investment over 90 days.

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

Helix Energy Solutions  vs.  NOV Inc

Helix Energy Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Helix Energy Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Helix Energy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

NOV Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NOV Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, NOV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Helix Energy and NOV

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

The idea behind Helix Energy Solutions and NOV Inc 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.