Correlation Between Nabors Energy and SwissCom

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

Diversification Opportunities for Nabors Energy and SwissCom

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Nabors and SwissCom is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and SwissCom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SwissCom AG 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 SwissCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SwissCom AG has no effect on the direction of Nabors Energy i.e., Nabors Energy and SwissCom go up and down completely randomly.

Pair Corralation between Nabors Energy and SwissCom

Assuming the 90 days horizon Nabors Energy Transition is expected to generate 0.37 times more return on investment than SwissCom. However, Nabors Energy Transition is 2.68 times less risky than SwissCom. It trades about 0.39 of its potential returns per unit of risk. SwissCom AG is currently generating about 0.0 per unit of risk. If you would invest  1,066  in Nabors Energy Transition on September 27, 2024 and sell it today you would earn a total of  29.00  from holding Nabors Energy Transition or generate 2.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Nabors Energy Transition  vs.  SwissCom AG

 Performance 
       Timeline  
Nabors Energy Transition 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 17 (%) 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 recent stock price uproar, may contribute to short-horizon losses for the private investors.
SwissCom AG 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SwissCom AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly 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 the company investors.

Nabors Energy and SwissCom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nabors Energy and SwissCom

The main advantage of trading using opposite Nabors Energy and SwissCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Energy position performs unexpectedly, SwissCom 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 SwissCom will offset losses from the drop in SwissCom's long position.
The idea behind Nabors Energy Transition and SwissCom AG 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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