Correlation Between COSCO SHIPPING and Halliburton

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

Diversification Opportunities for COSCO SHIPPING and Halliburton

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between COSCO and Halliburton is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING HOLDINGS and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and COSCO SHIPPING 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 COSCO SHIPPING HOLDINGS 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 COSCO SHIPPING i.e., COSCO SHIPPING and Halliburton go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and Halliburton

Assuming the 90 days trading horizon COSCO SHIPPING HOLDINGS is expected to generate 1.45 times more return on investment than Halliburton. However, COSCO SHIPPING is 1.45 times more volatile than Halliburton. It trades about 0.11 of its potential returns per unit of risk. Halliburton is currently generating about 0.08 per unit of risk. If you would invest  301.00  in COSCO SHIPPING HOLDINGS on April 5, 2022 and sell it today you would earn a total of  1,087  from holding COSCO SHIPPING HOLDINGS or generate 361.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy77.71%
ValuesDaily Returns

COSCO SHIPPING HOLDINGS  vs.  Halliburton

 Performance (%) 
      Timeline 
COSCO SHIPPING HOLDINGS 
COSCO Performance
0 of 100
Over the last 90 days COSCO SHIPPING HOLDINGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

COSCO 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 fragile performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in August 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0153
Payout Ratio
0.26
Last Split Factor
2:1
Forward Annual Dividend Rate
0.48
Dividend Date
2022-06-22
Ex Dividend Date
2022-05-31
Last Split Date
2006-07-17

Halliburton Price Channel

COSCO SHIPPING and Halliburton Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with COSCO SHIPPING and Halliburton

The main advantage of trading using opposite COSCO SHIPPING and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING 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 COSCO SHIPPING HOLDINGS 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.
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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