Correlation Between Nabors Energy and Bellevue Life

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

Diversification Opportunities for Nabors Energy and Bellevue Life

-0.28

Correlation Coefficient

Nabors Energy  Bellevue Life

Very good diversification

The 3 months correlation between Nabors and Bellevue is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and Bellevue Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Life Sciences 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 Bellevue Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Life Sciences has no effect on the direction of Nabors Energy i.e., Nabors Energy and Bellevue Life go up and down completely randomly.

Pair Corralation between Nabors Energy and Bellevue Life

Assuming the 90 days horizon Nabors Energy Transition is expected to generate 10.82 times more return on investment than Bellevue Life. However, Nabors Energy is 10.82 times more volatile than Bellevue Life Sciences. It trades about 0.15 of its potential returns per unit of risk. Bellevue Life Sciences is currently generating about 0.04 per unit of risk. If you would invest  7.79  in Nabors Energy Transition on October 8, 2024 and sell it today you would earn a total of  10.21  from holding Nabors Energy Transition or generate 131.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.8%
Values	Daily Returns

Nabors Energy Transition  vs.  Bellevue Life Sciences

Nabors Energy Transition

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Nabors Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Bellevue Life Sciences

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bellevue Life Sciences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Bellevue Life is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nabors Energy and Bellevue Life

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

The idea behind Nabors Energy Transition and Bellevue Life Sciences 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.