Correlation Between Schlumberger and Halliburton

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

Diversification Opportunities for Schlumberger and Halliburton

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Schlumberger and Halliburton is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Schlumberger NV and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Schlumberger 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 Schlumberger NV 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 Schlumberger i.e., Schlumberger and Halliburton go up and down completely randomly.

Pair Corralation between Schlumberger and Halliburton

Considering the 90-day investment horizon Schlumberger NV is expected to generate 0.98 times more return on investment than Halliburton. However, Schlumberger NV is 1.02 times less risky than Halliburton. It trades about 0.04 of its potential returns per unit of risk. Halliburton is currently generating about 0.03 per unit of risk. If you would invest  3,011  in Schlumberger NV on June 26, 2022 and sell it today you would earn a total of  489.00  from holding Schlumberger NV or generate 16.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Schlumberger NV  vs.  Halliburton

 Performance (%) 
       Timeline  
Schlumberger NV 
Schlumberger Performance
0 of 100
Over the last 90 days Schlumberger NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Schlumberger is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Schlumberger 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

Schlumberger and Halliburton Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Schlumberger and Halliburton

The main advantage of trading using opposite Schlumberger and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schlumberger 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.
Schlumberger vs. Industrias Bachoco SA
The idea behind Schlumberger NV 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. Industrias Bachoco SA
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 Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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