Correlation Between Nabors Industries and NORWEGIAN AIR
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and NORWEGIAN AIR 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 Industries and NORWEGIAN AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and NORWEGIAN AIR SHUT, you can compare the effects of market volatilities on Nabors Industries and NORWEGIAN AIR 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 Industries with a short position of NORWEGIAN AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and NORWEGIAN AIR.
Diversification Opportunities for Nabors Industries and NORWEGIAN AIR
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nabors and NORWEGIAN is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and NORWEGIAN AIR SHUT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORWEGIAN AIR SHUT and Nabors Industries 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 Industries are associated (or correlated) with NORWEGIAN AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORWEGIAN AIR SHUT has no effect on the direction of Nabors Industries i.e., Nabors Industries and NORWEGIAN AIR go up and down completely randomly.
Pair Corralation between Nabors Industries and NORWEGIAN AIR
Assuming the 90 days trading horizon Nabors Industries is expected to generate 1.22 times more return on investment than NORWEGIAN AIR. However, Nabors Industries is 1.22 times more volatile than NORWEGIAN AIR SHUT. It trades about 0.05 of its potential returns per unit of risk. NORWEGIAN AIR SHUT is currently generating about 0.0 per unit of risk. If you would invest 6,450 in Nabors Industries on September 3, 2024 and sell it today you would earn a total of 450.00 from holding Nabors Industries or generate 6.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nabors Industries vs. NORWEGIAN AIR SHUT
Performance |
Timeline |
Nabors Industries |
NORWEGIAN AIR SHUT |
Nabors Industries and NORWEGIAN AIR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nabors Industries and NORWEGIAN AIR
The main advantage of trading using opposite Nabors Industries and NORWEGIAN AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, NORWEGIAN AIR 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 NORWEGIAN AIR will offset losses from the drop in NORWEGIAN AIR's long position.Nabors Industries vs. NORWEGIAN AIR SHUT | Nabors Industries vs. Fair Isaac Corp | Nabors Industries vs. Rayonier Advanced Materials | Nabors Industries vs. Plastic Omnium |
NORWEGIAN AIR vs. TOTAL GABON | NORWEGIAN AIR vs. Walgreens Boots Alliance | NORWEGIAN AIR vs. Peak Resources Limited |
Check out your portfolio center.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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