Correlation Between Nabors Industries and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and Marfrig Global 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 Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and Marfrig Global Foods, you can compare the effects of market volatilities on Nabors Industries and Marfrig Global 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 Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and Marfrig Global.
Diversification Opportunities for Nabors Industries and Marfrig Global
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nabors and Marfrig is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods 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 Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of Nabors Industries i.e., Nabors Industries and Marfrig Global go up and down completely randomly.
Pair Corralation between Nabors Industries and Marfrig Global
Assuming the 90 days horizon Nabors Industries is expected to generate 3.65 times more return on investment than Marfrig Global. However, Nabors Industries is 3.65 times more volatile than Marfrig Global Foods. It trades about 0.19 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about -0.15 per unit of risk. If you would invest 370.00 in Nabors Industries on October 24, 2024 and sell it today you would earn a total of 125.00 from holding Nabors Industries or generate 33.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 90.0% |
Values | Daily Returns |
Nabors Industries vs. Marfrig Global Foods
Performance |
Timeline |
Nabors Industries |
Marfrig Global Foods |
Nabors Industries and Marfrig Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nabors Industries and Marfrig Global
The main advantage of trading using opposite Nabors Industries and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, Marfrig Global 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 Marfrig Global will offset losses from the drop in Marfrig Global's long position.Nabors Industries vs. Legacy Education | Nabors Industries vs. Apple Inc | Nabors Industries vs. NVIDIA | Nabors Industries vs. Microsoft |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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