Correlation Between Domo Fundo and Halliburton

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

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

Diversification Opportunities for Domo Fundo and Halliburton

-0.27

Correlation Coefficient

Domo Fundo  Halliburton

Very good diversification

The 3 months correlation between Domo and Halliburton is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Domo Fundo de and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Domo Fundo 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 Domo Fundo de 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 Domo Fundo i.e., Domo Fundo and Halliburton go up and down completely randomly.

Pair Corralation between Domo Fundo and Halliburton

Assuming the 90 days trading horizon Domo Fundo de is expected to generate 1.12 times more return on investment than Halliburton. However, Domo Fundo is 1.12 times more volatile than Halliburton. It trades about 0.07 of its potential returns per unit of risk. Halliburton is currently generating about 0.0 per unit of risk. If you would invest  4,357  in Domo Fundo de on October 4, 2024 and sell it today you would earn a total of  4,143  from holding Domo Fundo de or generate 95.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

Domo Fundo de  vs.  Halliburton

Domo Fundo de

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Domo Fundo de are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Domo Fundo sustained solid returns over the last few months and may actually be approaching a breakup point.

Halliburton

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Halliburton are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Halliburton may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Domo Fundo and Halliburton

The main advantage of trading using opposite Domo Fundo and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Domo Fundo 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 Domo Fundo de 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.