Correlation Between Nabors Industries and Paltalk

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

By analyzing existing cross correlation between Nabors Industries and Paltalk, you can compare the effects of market volatilities on Nabors Industries and Paltalk 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 Paltalk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and Paltalk.

Diversification Opportunities for Nabors Industries and Paltalk

-0.27

Correlation Coefficient

Nabors Industries  Paltalk

Very good diversification

The 3 months correlation between Nabors and Paltalk is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Paltalk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paltalk 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 Paltalk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paltalk has no effect on the direction of Nabors Industries i.e., Nabors Industries and Paltalk go up and down completely randomly.

Pair Corralation between Nabors Industries and Paltalk

Considering the 90-day investment horizon Nabors Industries is expected to generate 0.79 times more return on investment than Paltalk. However, Nabors Industries is 1.27 times less risky than Paltalk. It trades about -0.03 of its potential returns per unit of risk. Paltalk is currently generating about -0.15 per unit of risk. If you would invest  6,858  in Nabors Industries on September 19, 2024 and sell it today you would lose (686.00) from holding Nabors Industries or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nabors Industries  vs.  Paltalk

Nabors Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nabors Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Paltalk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paltalk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Nabors Industries and Paltalk

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

The idea behind Nabors Industries and Paltalk 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.