Correlation Between Klx Energy and Halliburton

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

Diversification Opportunities for Klx Energy and Halliburton

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Klx Energy and Halliburton is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Klx Energy Services and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Klx Energy 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 Klx Energy Services 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 Klx Energy i.e., Klx Energy and Halliburton go up and down completely randomly.

Pair Corralation between Klx Energy and Halliburton

Given the investment horizon of 90 days Klx Energy Services is expected to under-perform the Halliburton. In addition to that, Klx Energy is 1.29 times more volatile than Halliburton. It trades about -0.45 of its total potential returns per unit of risk. Halliburton is currently generating about -0.44 per unit of volatility. If you would invest  3,190  in Halliburton on June 29, 2022 and sell it today you would lose (859.00)  from holding Halliburton or give up 26.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

Klx Energy Services  vs.  Halliburton

 Performance (%) 
       Timeline  
Klx Energy Services 
Klx Energy Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Klx Energy Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Klx Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Klx Energy 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

Klx Energy and Halliburton Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Klx Energy and Halliburton

The main advantage of trading using opposite Klx Energy and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klx Energy 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.
Klx Energy vs. Kibush Capital Corp
The idea behind Klx Energy Services 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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