Correlation Between Mirgor SA and Halliburton

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

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

Diversification Opportunities for Mirgor SA and Halliburton

0.34

Correlation Coefficient

Mirgor SA  Halliburton

Weak diversification

The 3 months correlation between Mirgor and Halliburton is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mirgor SA and Halliburton Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Mirgor SA 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 Mirgor SA 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 Mirgor SA i.e., Mirgor SA and Halliburton go up and down completely randomly.

Pair Corralation between Mirgor SA and Halliburton

Assuming the 90 days trading horizon Mirgor SA is expected to generate 4.36 times less return on investment than Halliburton. In addition to that, Mirgor SA is 1.0 times more volatile than Halliburton Co. It trades about 0.01 of its total potential returns per unit of risk. Halliburton Co is currently generating about 0.04 per unit of volatility. If you would invest  1,533,204  in Halliburton Co on December 23, 2024 and sell it today you would earn a total of  59,296  from holding Halliburton Co or generate 3.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Mirgor SA  vs.  Halliburton Co

Mirgor SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mirgor SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mirgor SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Halliburton

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Halliburton Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Halliburton is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mirgor SA and Halliburton

The main advantage of trading using opposite Mirgor SA and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirgor SA 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 Mirgor SA and Halliburton Co 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.