Correlation Between Nabors Energy and Primavera Capital

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

Diversification Opportunities for Nabors Energy and Primavera Capital

-0.46

Correlation Coefficient

Nabors Energy  Primavera Capital

Very good diversification

The 3 months correlation between Nabors and Primavera is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and Primavera Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primavera Capital 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 Primavera Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primavera Capital has no effect on the direction of Nabors Energy i.e., Nabors Energy and Primavera Capital go up and down completely randomly.

Pair Corralation between Nabors Energy and Primavera Capital

If you would invest  1,066  in Nabors Energy Transition on September 29, 2024 and sell it today you would earn a total of  29.00  from holding Nabors Energy Transition or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Nabors Energy Transition  vs.  Primavera Capital Acquisition

Nabors Energy Transition

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Nabors Energy is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Primavera Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Primavera Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Primavera Capital is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nabors Energy and Primavera Capital

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

The idea behind Nabors Energy Transition and Primavera Capital Acquisition 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.