Correlation Between Cisco Systems and Halliburton

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cisco Systems 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 Cisco Systems and Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Halliburton, you can compare the effects of market volatilities on Cisco Systems 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 Cisco Systems with a short position of Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Halliburton.

Diversification Opportunities for Cisco Systems and Halliburton

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Cisco and Halliburton is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Cisco Systems 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 Cisco Systems 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 Cisco Systems i.e., Cisco Systems and Halliburton go up and down completely randomly.

Pair Corralation between Cisco Systems and Halliburton

Given the investment horizon of 90 days Cisco Systems is expected to generate 0.39 times more return on investment than Halliburton. However, Cisco Systems is 2.57 times less risky than Halliburton. It trades about 0.17 of its potential returns per unit of risk. Halliburton is currently generating about -0.14 per unit of risk. If you would invest  4,253  in Cisco Systems on May 15, 2022 and sell it today you would earn a total of  408.00  from holding Cisco Systems or generate 9.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cisco Systems  vs.  Halliburton

 Performance (%) 
       Timeline  
Cisco Systems 
Cisco Performance
0 of 100
Over the last 90 days Cisco Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Cisco Systems is not utilizing all of its potentials. The new stock price mess, may contribute to short-term losses for the institutional investors.

Cisco 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 September 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Halliburton Price Channel

Cisco Systems and Halliburton Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cisco Systems and Halliburton

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

Cisco Systems

Pair trading matchups for Cisco Systems

The idea behind Cisco Systems 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 Fund Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go