Friday, May 1, 2015

American Airlines And Halliburton - Ultimate Pairs Trade To Hedge Out Oil


Summary

  • The volatile price of oil makes investment decisions difficult in this market suggesting that a pairs trade is beneficial.
  • American Airlines Group benefits from lower oil prices while at the same time having catalysts for higher stock prices independent of oil.
  • Halliburton benefits from higher oil prices along with the catalyst of major synergy benefits from the Baker Hughes merger.
   When researching stocks in the current economic climate, one overriding issue continues to pop up. How to handle the volatile price swings of energy prices and specifically oil? Considering that some stocks benefit from lower oil prices and some need oil to rebound, the thought popped up that maybe the best move is to hedge a portfolio with stocks that balance each other out with the impact of oil.


 Read the full article on Seeking Alpha.


 Disclosure: Long AAL, HAL.  Please read the disclaimer page for more details.

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