Correlation Between Nabors Industries and NESNVX

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

By analyzing existing cross correlation between Nabors Industries and NESNVX 125 15 SEP 30, you can compare the effects of market volatilities on Nabors Industries and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and NESNVX.

Diversification Opportunities for Nabors Industries and NESNVX

0.08

Correlation Coefficient

Nabors Industries  NESNVX

Significant diversification

The 3 months correlation between Nabors and NESNVX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and NESNVX 125 15 SEP 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 125 15 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 125 15 has no effect on the direction of Nabors Industries i.e., Nabors Industries and NESNVX go up and down completely randomly.

Pair Corralation between Nabors Industries and NESNVX

Considering the 90-day investment horizon Nabors Industries is expected to under-perform the NESNVX. In addition to that, Nabors Industries is 2.47 times more volatile than NESNVX 125 15 SEP 30. It trades about -0.8 of its total potential returns per unit of risk. NESNVX 125 15 SEP 30 is currently generating about -0.62 per unit of volatility. If you would invest  8,373  in NESNVX 125 15 SEP 30 on September 30, 2024 and sell it today you would lose (347.00) from holding NESNVX 125 15 SEP 30 or give up 4.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	38.1%
Values	Daily Returns

Nabors Industries  vs.  NESNVX 125 15 SEP 30

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 conflicting 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.

NESNVX 125 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 125 15 SEP 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NESNVX 125 15 SEP 30 investors.

Pair Trading with Nabors Industries and NESNVX

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

The idea behind Nabors Industries and NESNVX 125 15 SEP 30 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.