Correlation Between Hanison Construction and Halliburton

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

By analyzing existing cross correlation between Hanison Construction Holdings and Halliburton, you can compare the effects of market volatilities on Hanison Construction and Halliburton 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 Hanison Construction with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanison Construction and Halliburton.

Diversification Opportunities for Hanison Construction and Halliburton

0.0

Correlation Coefficient

Hanison Construction  Halliburton

Pay attention - limited upside

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

Pair Corralation between Hanison Construction and Halliburton

Assuming the 90 days trading horizon Hanison Construction Holdings is expected to generate 1.04 times more return on investment than Halliburton. However, Hanison Construction is 1.04 times more volatile than Halliburton. It trades about 0.05 of its potential returns per unit of risk. Halliburton is currently generating about -0.02 per unit of risk. If you would invest  8.53  in Hanison Construction Holdings on October 9, 2024 and sell it today you would earn a total of  5.47  from holding Hanison Construction Holdings or generate 64.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.4%
Values	Daily Returns

Hanison Construction Holdings  vs.  Halliburton

Hanison Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hanison Construction Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Hanison Construction is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Halliburton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Halliburton has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Halliburton is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hanison Construction and Halliburton

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

The idea behind Hanison Construction Holdings and Halliburton 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.