Correlation Between Halliburton and Atlas Salt

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

Diversification Opportunities for Halliburton and Atlas Salt

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Halliburton and Atlas is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Halliburton and Atlas Salt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Salt 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 Atlas Salt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Salt has no effect on the direction of Halliburton i.e., Halliburton and Atlas Salt go up and down completely randomly.

Pair Corralation between Halliburton and Atlas Salt

Considering the 90-day investment horizon Halliburton is expected to under-perform the Atlas Salt. But the stock apears to be less risky and, when comparing its historical volatility, Halliburton is 6.51 times less risky than Atlas Salt. The stock trades about -0.08 of its potential returns per unit of risk. The Atlas Salt is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  222.00  in Atlas Salt on May 10, 2022 and sell it today you would earn a total of  76.00  from holding Atlas Salt or generate 34.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Halliburton  vs.  Atlas Salt

 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 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

Atlas Salt 
Atlas Performance
15 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Salt are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Atlas Salt exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atlas Price Channel

Halliburton and Atlas Salt Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Halliburton and Atlas Salt

The main advantage of trading using opposite Halliburton and Atlas Salt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halliburton position performs unexpectedly, Atlas Salt 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 Atlas Salt will offset losses from the drop in Atlas Salt's long position.
The idea behind Halliburton and Atlas Salt 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.

Atlas Salt

Pair trading matchups for Atlas Salt

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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