Correlation Between Nabors Industries and Pharmala Biotech

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

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

Diversification Opportunities for Nabors Industries and Pharmala Biotech

-0.16

Correlation Coefficient

Nabors Industries  Pharmala Biotech

Good diversification

The 3 months correlation between Nabors and Pharmala is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Pharmala Biotech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharmala Biotech Holdings 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 Pharmala Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharmala Biotech Holdings has no effect on the direction of Nabors Industries i.e., Nabors Industries and Pharmala Biotech go up and down completely randomly.

Pair Corralation between Nabors Industries and Pharmala Biotech

If you would invest  6,413  in Nabors Industries on September 16, 2024 and sell it today you would earn a total of  125.00  from holding Nabors Industries or generate 1.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Nabors Industries  vs.  Pharmala Biotech Holdings

Nabors Industries

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Nabors Industries is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pharmala Biotech Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pharmala Biotech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Pharmala Biotech is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nabors Industries and Pharmala Biotech

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

The idea behind Nabors Industries and Pharmala Biotech Holdings 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.