Correlation Between Hurco Companies and Nabors Industries

Can any of the company-specific risk be diversified away by investing in both Hurco Companies and Nabors Industries 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 Hurco Companies and Nabors Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hurco Companies and Nabors Industries, you can compare the effects of market volatilities on Hurco Companies and Nabors Industries 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 Hurco Companies with a short position of Nabors Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and Nabors Industries.

Diversification Opportunities for Hurco Companies and Nabors Industries

0.6

Correlation Coefficient

Hurco Companies  Nabors Industries

Poor diversification

The 3 months correlation between Hurco and Nabors is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Nabors Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Industries and Hurco Companies 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 Hurco Companies are associated (or correlated) with Nabors Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Industries has no effect on the direction of Hurco Companies i.e., Hurco Companies and Nabors Industries go up and down completely randomly.

Pair Corralation between Hurco Companies and Nabors Industries

Given the investment horizon of 90 days Hurco Companies is expected to generate 0.85 times more return on investment than Nabors Industries. However, Hurco Companies is 1.18 times less risky than Nabors Industries. It trades about 0.03 of its potential returns per unit of risk. Nabors Industries is currently generating about -0.08 per unit of risk. If you would invest  1,830  in Hurco Companies on September 25, 2024 and sell it today you would earn a total of  45.00  from holding Hurco Companies or generate 2.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Hurco Companies  vs.  Nabors Industries

Hurco Companies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hurco Companies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Hurco Companies is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Nabors Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nabors Industries 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 fundamental drivers remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Hurco Companies and Nabors Industries

The main advantage of trading using opposite Hurco Companies and Nabors Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies position performs unexpectedly, Nabors Industries 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 Nabors Industries will offset losses from the drop in Nabors Industries' long position.

The idea behind Hurco Companies and Nabors Industries 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.

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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 the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.