Correlation Between Awilco Drilling and Nabors Industries
Can any of the company-specific risk be diversified away by investing in both Awilco Drilling 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 Awilco Drilling and Nabors Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Awilco Drilling PLC and Nabors Industries, you can compare the effects of market volatilities on Awilco Drilling 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 Awilco Drilling with a short position of Nabors Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Awilco Drilling and Nabors Industries.
Diversification Opportunities for Awilco Drilling and Nabors Industries
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Awilco and Nabors is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Awilco Drilling PLC and Nabors Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Industries and Awilco Drilling 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 Awilco Drilling PLC 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 Awilco Drilling i.e., Awilco Drilling and Nabors Industries go up and down completely randomly.
Pair Corralation between Awilco Drilling and Nabors Industries
Assuming the 90 days horizon Awilco Drilling PLC is expected to under-perform the Nabors Industries. But the otc stock apears to be less risky and, when comparing its historical volatility, Awilco Drilling PLC is 5.95 times less risky than Nabors Industries. The otc stock trades about -0.22 of its potential returns per unit of risk. The Nabors Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,287 in Nabors Industries on August 28, 2024 and sell it today you would earn a total of 222.00 from holding Nabors Industries or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Awilco Drilling PLC vs. Nabors Industries
Performance |
| Timeline |
| Awilco Drilling PLC |
| Nabors Industries |
Awilco Drilling and Nabors Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Awilco Drilling and Nabors Industries
The main advantage of trading using opposite Awilco Drilling and Nabors Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Awilco Drilling 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.| Awilco Drilling vs. Noble plc | Awilco Drilling vs. Sinopec Oilfield Service | Awilco Drilling vs. Transocean | Awilco Drilling vs. Helmerich and Payne |
| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Borr Drilling |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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