Correlation Between Vroom and Baker Hughes

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

Diversification Opportunities for Vroom and Baker Hughes

  Correlation Coefficient

Good diversification

The 3 months correlation between Vroom and Baker is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Vroom Inc and Baker Hughes A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes A and Vroom 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 Vroom Inc are associated (or correlated) with Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes A has no effect on the direction of Vroom i.e., Vroom and Baker Hughes go up and down completely randomly.

Pair Corralation between Vroom and Baker Hughes

Considering the 90-day investment horizon Vroom Inc is expected to under-perform the Baker Hughes. In addition to that, Vroom is 2.38 times more volatile than Baker Hughes A. It trades about -0.08 of its total potential returns per unit of risk. Baker Hughes A is currently generating about 0.05 per unit of volatility. If you would invest  1,235  in Baker Hughes A on June 29, 2022 and sell it today you would earn a total of  841.00  from holding Baker Hughes A or generate 68.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
ValuesDaily Returns

Vroom Inc  vs.  Baker Hughes A

 Performance (%) 
Vroom Inc 
Vroom Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Vroom Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Vroom revealed solid returns over the last few months and may actually be approaching a breakup point.

Vroom Price Channel

Baker Hughes A 
Baker Performance
0 of 100
Over the last 90 days Baker Hughes A 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 forward-looking signals remain relatively invariable which may send shares a bit higher in October 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Baker Price Channel

Vroom and Baker Hughes Volatility Contrast

   Predicted Return Density   

Pair Trading with Vroom and Baker Hughes

The main advantage of trading using opposite Vroom and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vroom position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.
Vroom vs. Clearwater Paper Corp
The idea behind Vroom Inc and Baker Hughes A 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.
Baker Hughes 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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