Correlation Between Nabors Industries and Helmerich Payne

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

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

Diversification Opportunities for Nabors Industries and Helmerich Payne

0.88

Correlation Coefficient

Nabors Industries  Helmerich Payne

Very poor diversification

The 3 months correlation between Nabors and Helmerich is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Helmerich Payne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helmerich Payne and Nabors Industries 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 Nabors Industries are associated (or correlated) with Helmerich Payne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helmerich Payne has no effect on the direction of Nabors Industries i.e., Nabors Industries and Helmerich Payne go up and down completely randomly.

Pair Corralation between Nabors Industries and Helmerich Payne

Assuming the 90 days trading horizon Nabors Industries is expected to under-perform the Helmerich Payne. In addition to that, Nabors Industries is 1.79 times more volatile than Helmerich Payne. It trades about -0.2 of its total potential returns per unit of risk. Helmerich Payne is currently generating about -0.15 per unit of volatility. If you would invest  3,259  in Helmerich Payne on November 29, 2024 and sell it today you would lose (721.00) from holding Helmerich Payne or give up 22.12% of portfolio value over 90 days.

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

Nabors Industries  vs.  Helmerich Payne

Nabors Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nabors Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Helmerich Payne

Risk-Adjusted Performance

Very Weak

Over the last 90 days Helmerich Payne has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nabors Industries and Helmerich Payne

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

The idea behind Nabors Industries and Helmerich Payne 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.