Correlation Between Halliburton and CSI Compressco

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

Diversification Opportunities for Halliburton and CSI Compressco

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Halliburton and CSI Compressco is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and CSI Compressco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSI Compressco and Halliburton 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 Halliburton are associated (or correlated) with CSI Compressco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSI Compressco has no effect on the direction of Halliburton i.e., Halliburton and CSI Compressco go up and down completely randomly.

Pair Corralation between Halliburton and CSI Compressco

Considering the 90-day investment horizon Halliburton is expected to under-perform the CSI Compressco. In addition to that, Halliburton is 1.14 times more volatile than CSI Compressco. It trades about -0.26 of its total potential returns per unit of risk. CSI Compressco is currently generating about -0.11 per unit of volatility. If you would invest  126.00  in CSI Compressco on July 4, 2022 and sell it today you would lose (9.00)  from holding CSI Compressco or give up 7.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Halliburton  vs.  CSI Compressco

 Performance (%) 
       Timeline  
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 conflicting performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in November 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Halliburton Price Channel

CSI Compressco 
CSI Compressco Performance
0 of 100
Over the last 90 days CSI Compressco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm insiders.

CSI Compressco Price Channel

Halliburton and CSI Compressco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Halliburton and CSI Compressco

The main advantage of trading using opposite Halliburton and CSI Compressco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, CSI Compressco 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 CSI Compressco will offset losses from the drop in CSI Compressco's long position.
Halliburton vs. Amazon Inc
The idea behind Halliburton and CSI Compressco 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.
CSI Compressco vs. Amazon Inc
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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