Correlation Between Aeye and Nabors Industries
Can any of the company-specific risk be diversified away by investing in both Aeye 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 Aeye and Nabors Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Nabors Industries, you can compare the effects of market volatilities on Aeye 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 Aeye with a short position of Nabors Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Nabors Industries.
Diversification Opportunities for Aeye and Nabors Industries
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aeye and Nabors is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Nabors Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Industries and Aeye 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 Aeye Inc 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 Aeye i.e., Aeye and Nabors Industries go up and down completely randomly.
Pair Corralation between Aeye and Nabors Industries
Given the investment horizon of 90 days Aeye Inc is expected to generate 3.12 times more return on investment than Nabors Industries. However, Aeye is 3.12 times more volatile than Nabors Industries. It trades about 0.01 of its potential returns per unit of risk. Nabors Industries is currently generating about 0.01 per unit of risk. If you would invest 229.00 in Aeye Inc on August 25, 2024 and sell it today you would lose (133.00) from holding Aeye Inc or give up 58.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeye Inc vs. Nabors Industries
Performance |
| Timeline |
| Aeye Inc |
| Nabors Industries |
Aeye and Nabors Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and Nabors Industries
The main advantage of trading using opposite Aeye and Nabors Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye 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 Aeye Inc 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.| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |