Correlation Between Nabors Industries and ChampionX
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and ChampionX 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 ChampionX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and ChampionX, you can compare the effects of market volatilities on Nabors Industries and ChampionX 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 ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and ChampionX.
Diversification Opportunities for Nabors Industries and ChampionX
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nabors and ChampionX is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX 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 ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Nabors Industries i.e., Nabors Industries and ChampionX go up and down completely randomly.
Pair Corralation between Nabors Industries and ChampionX
Considering the 90-day investment horizon Nabors Industries is expected to under-perform the ChampionX. In addition to that, Nabors Industries is 1.62 times more volatile than ChampionX. It trades about -0.03 of its total potential returns per unit of risk. ChampionX is currently generating about 0.02 per unit of volatility. If you would invest 2,796 in ChampionX on September 14, 2024 and sell it today you would earn a total of 157.00 from holding ChampionX or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nabors Industries vs. ChampionX
Performance |
| Timeline |
| Nabors Industries |
| ChampionX |
Nabors Industries and ChampionX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and ChampionX
The main advantage of trading using opposite Nabors Industries and ChampionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, ChampionX 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 ChampionX will offset losses from the drop in ChampionX's long position.| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Noble plc | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Sable Offshore Corp |
| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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