Correlation Between Nabors Industries and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and Anheuser Busch 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 Industries and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and Anheuser Busch Inbev, you can compare the effects of market volatilities on Nabors Industries and Anheuser Busch 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 Industries with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and Anheuser Busch.
Diversification Opportunities for Nabors Industries and Anheuser Busch
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nabors and Anheuser is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev and Nabors Industries 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 Industries are associated (or correlated) with Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Nabors Industries i.e., Nabors Industries and Anheuser Busch go up and down completely randomly.
Pair Corralation between Nabors Industries and Anheuser Busch
Considering the 90-day investment horizon Nabors Industries is expected to generate 2.24 times more return on investment than Anheuser Busch. However, Nabors Industries is 2.24 times more volatile than Anheuser Busch Inbev. It trades about 0.06 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.5 per unit of risk. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nabors Industries vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Nabors Industries |
| Anheuser Busch Inbev |
Nabors Industries and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and Anheuser Busch
The main advantage of trading using opposite Nabors Industries and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch's long position.| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Borr Drilling |
| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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