Correlation Between Helmerich and GMO Internet

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

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

Diversification Opportunities for Helmerich and GMO Internet

-0.15

Correlation Coefficient

Helmerich  GMO Internet

Good diversification

The 3 months correlation between Helmerich and GMO is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Helmerich and Payne and GMO Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMO Internet and Helmerich 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 Helmerich and Payne are associated (or correlated) with GMO Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMO Internet has no effect on the direction of Helmerich i.e., Helmerich and GMO Internet go up and down completely randomly.

Pair Corralation between Helmerich and GMO Internet

Allowing for the 90-day total investment horizon Helmerich and Payne is expected to generate 1.21 times more return on investment than GMO Internet. However, Helmerich is 1.21 times more volatile than GMO Internet. It trades about -0.07 of its potential returns per unit of risk. GMO Internet is currently generating about -0.16 per unit of risk. If you would invest  3,389  in Helmerich and Payne on October 11, 2024 and sell it today you would lose (110.00) from holding Helmerich and Payne or give up 3.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Helmerich and Payne  vs.  GMO Internet

Helmerich and Payne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helmerich and Payne has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

GMO Internet

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Helmerich and GMO Internet

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

The idea behind Helmerich and Payne and GMO Internet 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.