Correlation Between Nabors Industries and NuRAN Wireless

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

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

Diversification Opportunities for Nabors Industries and NuRAN Wireless

0.51

Correlation Coefficient

Nabors Industries  NuRAN Wireless

Very weak diversification

The 3 months correlation between Nabors and NuRAN is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and NuRAN Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuRAN Wireless 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 NuRAN Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuRAN Wireless has no effect on the direction of Nabors Industries i.e., Nabors Industries and NuRAN Wireless go up and down completely randomly.

Pair Corralation between Nabors Industries and NuRAN Wireless

Considering the 90-day investment horizon Nabors Industries is expected to under-perform the NuRAN Wireless. But the stock apears to be less risky and, when comparing its historical volatility, Nabors Industries is 1.46 times less risky than NuRAN Wireless. The stock trades about -0.71 of its potential returns per unit of risk. The NuRAN Wireless is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  6.53  in NuRAN Wireless on September 22, 2024 and sell it today you would lose (0.79) from holding NuRAN Wireless or give up 12.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Nabors Industries  vs.  NuRAN Wireless

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 unsteady 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.

NuRAN Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nabors Industries and NuRAN Wireless

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

The idea behind Nabors Industries and NuRAN Wireless 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 the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.