Correlation Between Visa and NABORS

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

By analyzing existing cross correlation between Visa Class A and NABORS INDS LTD, you can compare the effects of market volatilities on Visa and NABORS 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 Visa with a short position of NABORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and NABORS.

Diversification Opportunities for Visa and NABORS

0.0

Correlation Coefficient

Visa  NABORS

Pay attention - limited upside

The 3 months correlation between Visa and NABORS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and NABORS INDS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NABORS INDS LTD and Visa 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 Visa Class A are associated (or correlated) with NABORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NABORS INDS LTD has no effect on the direction of Visa i.e., Visa and NABORS go up and down completely randomly.

Pair Corralation between Visa and NABORS

If you would invest  31,812  in Visa Class A on December 27, 2024 and sell it today you would earn a total of  2,606  from holding Visa Class A or generate 8.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Visa Class A  vs.  NABORS INDS LTD

Visa Class A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in April 2025.

NABORS INDS LTD

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Visa and NABORS

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

The idea behind Visa Class A and NABORS INDS LTD 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.