Correlation Between Paltalk and Nabors Industries

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

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

Diversification Opportunities for Paltalk and Nabors Industries

-0.27

Correlation Coefficient

Paltalk  Nabors Industries

Very good diversification

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

Pair Corralation between Paltalk and Nabors Industries

Given the investment horizon of 90 days Paltalk is expected to under-perform the Nabors Industries. In addition to that, Paltalk is 1.46 times more volatile than Nabors Industries. It trades about -0.08 of its total potential returns per unit of risk. Nabors Industries is currently generating about 0.0 per unit of volatility. If you would invest  6,739  in Nabors Industries on September 19, 2024 and sell it today you would lose (567.00) from holding Nabors Industries or give up 8.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Paltalk  vs.  Nabors Industries

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.

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.

Pair Trading with Paltalk and Nabors Industries

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

The idea behind Paltalk and Nabors Industries 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.