Correlation Between Bed Bath and Halliburton

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Can any of the company-specific risk be diversified away by investing in both Bed Bath 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 Bed Bath and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bed Bath Beyond and Halliburton, you can compare the effects of market volatilities on Bed Bath 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 Bed Bath with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bed Bath and Halliburton.

Diversification Opportunities for Bed Bath and Halliburton

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between Bed Bath and Halliburton is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bed Bath Beyond and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Bed Bath 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 Bed Bath Beyond 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 Bed Bath i.e., Bed Bath and Halliburton go up and down completely randomly.

Pair Corralation between Bed Bath and Halliburton

Given the investment horizon of 90 days Bed Bath is expected to generate 2.42 times less return on investment than Halliburton. In addition to that, Bed Bath is 2.54 times more volatile than Halliburton. It trades about 0.01 of its total potential returns per unit of risk. Halliburton is currently generating about 0.06 per unit of volatility. If you would invest  1,168  in Halliburton on June 28, 2022 and sell it today you would earn a total of  1,163  from holding Halliburton or generate 99.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Bed Bath Beyond  vs.  Halliburton

 Performance (%) 
       Timeline  
Bed Bath Beyond 
Bed Bath Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bed Bath Beyond are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental drivers, Bed Bath showed solid returns over the last few months and may actually be approaching a breakup point.

Bed Bath Price Channel

Halliburton 
Halliburton Performance
0 of 100
Over the last 90 days Halliburton has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in October 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Halliburton Price Channel

Bed Bath and Halliburton Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bed Bath and Halliburton

The main advantage of trading using opposite Bed Bath and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bed Bath 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.
Bed Bath vs. Clearwater Paper Corp
The idea behind Bed Bath Beyond 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.
Halliburton vs. Kibush Capital Corp
Check out your portfolio center. 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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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