Correlation Between SOI Old and Baker Hughes

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

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

Diversification Opportunities for SOI Old and Baker Hughes

0.62

Correlation Coefficient

SOI Old  Baker Hughes

Poor diversification

The 3 months correlation between SOI and Baker is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SOI Old and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and SOI Old 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 SOI Old are associated (or correlated) with Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of SOI Old i.e., SOI Old and Baker Hughes go up and down completely randomly.

Pair Corralation between SOI Old and Baker Hughes

If you would invest  4,088  in Baker Hughes Co on October 26, 2024 and sell it today you would earn a total of  478.00  from holding Baker Hughes Co or generate 11.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.56%
Values	Daily Returns

SOI Old  vs.  Baker Hughes Co

SOI Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, SOI Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Baker Hughes

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baker Hughes Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking signals, Baker Hughes reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOI Old and Baker Hughes

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

The idea behind SOI Old and Baker Hughes 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.