Correlation Between Nabors Industries and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and Skechers USA 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 Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and Skechers USA, you can compare the effects of market volatilities on Nabors Industries and Skechers USA 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 Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and Skechers USA.
Diversification Opportunities for Nabors Industries and Skechers USA
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nabors and Skechers is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA 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 Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Nabors Industries i.e., Nabors Industries and Skechers USA go up and down completely randomly.
Pair Corralation between Nabors Industries and Skechers USA
Considering the 90-day investment horizon Nabors Industries is expected to under-perform the Skechers USA. In addition to that, Nabors Industries is 2.04 times more volatile than Skechers USA. It trades about 0.0 of its total potential returns per unit of risk. Skechers USA is currently generating about 0.12 per unit of volatility. If you would invest 6,146 in Skechers USA on September 1, 2024 and sell it today you would earn a total of 236.00 from holding Skechers USA or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nabors Industries vs. Skechers USA
Performance |
| Timeline |
| Nabors Industries |
| Skechers USA |
Nabors Industries and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and Skechers USA
The main advantage of trading using opposite Nabors Industries and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA's long position.| Nabors Industries vs. Borr Drilling | Nabors Industries vs. Patterson UTI Energy | Nabors Industries vs. Noble plc | Nabors Industries vs. Helmerich and Payne |
| Skechers USA vs. Deckers Outdoor | Skechers USA vs. On Holding | Skechers USA vs. Crocs Inc | Skechers USA vs. Designer Brands |
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 Stocks Directory module to find actively traded stocks across global markets.
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