Correlation Between Kontoor Brands and Nabors Industries
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands 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 Kontoor Brands and Nabors Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Nabors Industries, you can compare the effects of market volatilities on Kontoor Brands 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 Kontoor Brands with a short position of Nabors Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Nabors Industries.
Diversification Opportunities for Kontoor Brands and Nabors Industries
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kontoor and Nabors is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Nabors Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Industries and Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands i.e., Kontoor Brands and Nabors Industries go up and down completely randomly.
Pair Corralation between Kontoor Brands and Nabors Industries
Considering the 90-day investment horizon Kontoor Brands is expected to generate 0.64 times more return on investment than Nabors Industries. However, Kontoor Brands is 1.57 times less risky than Nabors Industries. It trades about 0.17 of its potential returns per unit of risk. Nabors Industries is currently generating about 0.0 per unit of risk. If you would invest 8,563 in Kontoor Brands on September 1, 2024 and sell it today you would earn a total of 615.00 from holding Kontoor Brands or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. Nabors Industries
Performance |
| Timeline |
| Kontoor Brands |
| Nabors Industries |
Kontoor Brands and Nabors Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Nabors Industries
The main advantage of trading using opposite Kontoor Brands and Nabors Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands 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.| Kontoor Brands vs. VF Corporation | Kontoor Brands vs. Levi Strauss Co | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Oxford Industries |
| Nabors Industries vs. Borr Drilling | Nabors Industries vs. Patterson UTI Energy | Nabors Industries vs. Noble plc | Nabors Industries vs. Helmerich and Payne |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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