Correlation Between Nabors Energy and 443510AK8

Can any of the company-specific risk be diversified away by investing in both Nabors Energy and 443510AK8 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 443510AK8 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 HUBB 23 15 MAR 31, you can compare the effects of market volatilities on Nabors Energy and 443510AK8 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 443510AK8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Energy and 443510AK8.

Diversification Opportunities for Nabors Energy and 443510AK8

-0.43

Correlation Coefficient

Nabors Energy  443510AK8

Very good diversification

The 3 months correlation between Nabors and 443510AK8 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and HUBB 23 15 MAR 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUBB 23 15 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 443510AK8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUBB 23 15 has no effect on the direction of Nabors Energy i.e., Nabors Energy and 443510AK8 go up and down completely randomly.

Pair Corralation between Nabors Energy and 443510AK8

Assuming the 90 days horizon Nabors Energy is expected to generate 1.51 times less return on investment than 443510AK8. But when comparing it to its historical volatility, Nabors Energy Transition is 2.51 times less risky than 443510AK8. It trades about 0.13 of its potential returns per unit of risk. HUBB 23 15 MAR 31 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  8,626  in HUBB 23 15 MAR 31 on October 12, 2024 and sell it today you would earn a total of  51.00  from holding HUBB 23 15 MAR 31 or generate 0.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	40.0%
Values	Daily Returns

Nabors Energy Transition  vs.  HUBB 23 15 MAR 31

Nabors Energy Transition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 9 (%) 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.

HUBB 23 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUBB 23 15 MAR 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 443510AK8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nabors Energy and 443510AK8

The main advantage of trading using opposite Nabors Energy and 443510AK8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Energy position performs unexpectedly, 443510AK8 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 443510AK8 will offset losses from the drop in 443510AK8's long position.

The idea behind Nabors Energy Transition and HUBB 23 15 MAR 31 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.