Correlation Between NOV and Helix Energy

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

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

Diversification Opportunities for NOV and Helix Energy

0.02

Correlation Coefficient

NOV  Helix Energy

Significant diversification

The 3 months correlation between NOV and Helix is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding NOV Inc and Helix Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helix Energy Solutions and NOV 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 NOV Inc are associated (or correlated) with Helix Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helix Energy Solutions has no effect on the direction of NOV i.e., NOV and Helix Energy go up and down completely randomly.

Pair Corralation between NOV and Helix Energy

Considering the 90-day investment horizon NOV Inc is expected to generate 0.95 times more return on investment than Helix Energy. However, NOV Inc is 1.05 times less risky than Helix Energy. It trades about 0.04 of its potential returns per unit of risk. Helix Energy Solutions is currently generating about -0.05 per unit of risk. If you would invest  1,411  in NOV Inc on December 18, 2024 and sell it today you would earn a total of  49.00  from holding NOV Inc or generate 3.47% return on investment over 90 days.

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

NOV Inc  vs.  Helix Energy Solutions

NOV Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NOV Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, NOV is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 latest inconsistent performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with NOV and Helix Energy

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

The idea behind NOV Inc and Helix Energy Solutions 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..