Correlation Between Nabors Industries and Postal Realty
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and Postal Realty 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 Postal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and Postal Realty Trust, you can compare the effects of market volatilities on Nabors Industries and Postal Realty 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 Postal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and Postal Realty.
Diversification Opportunities for Nabors Industries and Postal Realty
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nabors and Postal is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Postal Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Realty Trust 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 Postal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Realty Trust has no effect on the direction of Nabors Industries i.e., Nabors Industries and Postal Realty go up and down completely randomly.
Pair Corralation between Nabors Industries and Postal Realty
Considering the 90-day investment horizon Nabors Industries is expected to generate 3.64 times more return on investment than Postal Realty. However, Nabors Industries is 3.64 times more volatile than Postal Realty Trust. It trades about 0.01 of its potential returns per unit of risk. Postal Realty Trust is currently generating about 0.02 per unit of risk. If you would invest 7,986 in Nabors Industries on September 2, 2024 and sell it today you would lose (643.00) from holding Nabors Industries or give up 8.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nabors Industries vs. Postal Realty Trust
Performance |
| Timeline |
| Nabors Industries |
| Postal Realty Trust |
Nabors Industries and Postal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and Postal Realty
The main advantage of trading using opposite Nabors Industries and Postal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, Postal Realty 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 Postal Realty will offset losses from the drop in Postal Realty's long position.| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Borr Drilling |
| Postal Realty vs. Office Properties Income | Postal Realty vs. Boston Properties | Postal Realty vs. SL Green Realty | Postal Realty vs. Alexandria Real Estate |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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