Correlation Between Oil States and Helix Energy

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

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

Diversification Opportunities for Oil States and Helix Energy

0.28

Correlation Coefficient

Oil States  Helix Energy

Modest diversification

The 3 months correlation between Oil and Helix is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Oil States International 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 Oil States 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 Oil States International 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 Oil States i.e., Oil States and Helix Energy go up and down completely randomly.

Pair Corralation between Oil States and Helix Energy

Considering the 90-day investment horizon Oil States International is expected to generate 1.23 times more return on investment than Helix Energy. However, Oil States is 1.23 times more volatile than Helix Energy Solutions. It trades about 0.0 of its potential returns per unit of risk. Helix Energy Solutions is currently generating about -0.16 per unit of risk. If you would invest  550.00  in Oil States International on November 28, 2024 and sell it today you would lose (17.00) from holding Oil States International or give up 3.09% of portfolio value over 90 days.

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

Oil States International  vs.  Helix Energy Solutions

Oil States International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oil States International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Oil States is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private 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 inconsistent performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Oil States and Helix Energy

The main advantage of trading using opposite Oil States and Helix Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil States 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 Oil States International 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.