Correlation Between Helix Energy and Oil States

Can any of the company-specific risk be diversified away by investing in both Helix Energy and Oil States 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 Oil States 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 Oil States International, you can compare the effects of market volatilities on Helix Energy and Oil States 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 Oil States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helix Energy and Oil States.

Diversification Opportunities for Helix Energy and Oil States

0.13

Correlation Coefficient

Helix Energy  Oil States

Average diversification

The 3 months correlation between Helix and Oil is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Helix Energy Solutions and Oil States International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil States International 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 Oil States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil States International has no effect on the direction of Helix Energy i.e., Helix Energy and Oil States go up and down completely randomly.

Pair Corralation between Helix Energy and Oil States

Considering the 90-day investment horizon Helix Energy Solutions is expected to under-perform the Oil States. But the stock apears to be less risky and, when comparing its historical volatility, Helix Energy Solutions is 1.14 times less risky than Oil States. The stock trades about -0.02 of its potential returns per unit of risk. The Oil States International is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  483.00  in Oil States International on December 26, 2024 and sell it today you would earn a total of  72.00  from holding Oil States International or generate 14.91% 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.  Oil States International

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 newest stock price disturbance, may contribute to short-term losses for the investors.

Oil States International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oil States International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent forward indicators, Oil States unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helix Energy and Oil States

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

The idea behind Helix Energy Solutions and Oil States International 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.