Correlation Between Nabors Energy and Kuya Silver

Can any of the company-specific risk be diversified away by investing in both Nabors Energy and Kuya Silver 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 Kuya Silver 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 Kuya Silver, you can compare the effects of market volatilities on Nabors Energy and Kuya Silver 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 Kuya Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Energy and Kuya Silver.

Diversification Opportunities for Nabors Energy and Kuya Silver

-0.67

Correlation Coefficient

Nabors Energy  Kuya Silver

Excellent diversification

The 3 months correlation between Nabors and Kuya is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and Kuya Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuya Silver 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 Kuya Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuya Silver has no effect on the direction of Nabors Energy i.e., Nabors Energy and Kuya Silver go up and down completely randomly.

Pair Corralation between Nabors Energy and Kuya Silver

Assuming the 90 days horizon Nabors Energy is expected to generate 1.52 times less return on investment than Kuya Silver. But when comparing it to its historical volatility, Nabors Energy Transition is 12.15 times less risky than Kuya Silver. It trades about 0.2 of its potential returns per unit of risk. Kuya Silver is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Kuya Silver on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Kuya Silver or generate 0.0% return on investment over 90 days.

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

Nabors Energy Transition  vs.  Kuya Silver

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Kuya Silver

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nabors Energy and Kuya Silver

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

The idea behind Nabors Energy Transition and Kuya Silver 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..