Correlation Between Nabors Energy and Ballantyne Strong

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

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

Diversification Opportunities for Nabors Energy and Ballantyne Strong

-0.71

Correlation Coefficient

Nabors Energy  Ballantyne Strong

Pay attention - limited upside

The 3 months correlation between Nabors and Ballantyne is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and Ballantyne Strong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballantyne Strong and Nabors Energy 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 Energy Transition are associated (or correlated) with Ballantyne Strong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballantyne Strong has no effect on the direction of Nabors Energy i.e., Nabors Energy and Ballantyne Strong go up and down completely randomly.

Pair Corralation between Nabors Energy and Ballantyne Strong

If you would invest  1,066  in Nabors Energy Transition on October 3, 2024 and sell it today you would earn a total of  18.00  from holding Nabors Energy Transition or generate 1.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

Nabors Energy Transition  vs.  Ballantyne Strong

Nabors Energy Transition

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Nabors Energy is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Ballantyne Strong

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ballantyne Strong has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ballantyne Strong is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nabors Energy and Ballantyne Strong

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

The idea behind Nabors Energy Transition and Ballantyne Strong 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.