Correlation Between Visa and Halliburton

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

Diversification Opportunities for Visa and Halliburton

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Visa and Halliburton is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Visa Inc and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton and Visa 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 Visa Inc 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 Visa i.e., Visa and Halliburton go up and down completely randomly.

Pair Corralation between Visa and Halliburton

Taking into account the 90-day investment horizon Visa is expected to generate 10.13 times less return on investment than Halliburton. But when comparing it to its historical volatility, Visa Inc is 1.8 times less risky than Halliburton. It trades about 0.01 of its potential returns per unit of risk. Halliburton is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,223  in Halliburton on April 5, 2022 and sell it today you would earn a total of  1,920  from holding Halliburton or generate 156.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Visa Inc  vs.  Halliburton

 Performance (%) 
      Timeline 
Visa Inc 
Visa Performance
0 of 100
Over the last 90 days Visa Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0075
Payout Ratio
0.22
Last Split Factor
4:1
Forward Annual Dividend Rate
1.5
Dividend Date
2022-06-01
Ex Dividend Date
2022-05-12
Last Split Date
2015-03-19

Visa 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 fragile performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in August 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0153
Payout Ratio
0.26
Last Split Factor
2:1
Forward Annual Dividend Rate
0.48
Dividend Date
2022-06-22
Ex Dividend Date
2022-05-31
Last Split Date
2006-07-17

Halliburton Price Channel

Visa and Halliburton Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Visa and Halliburton

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