Correlation Between Nabors Industries and SNDL
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and SNDL 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 SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and SNDL Inc, you can compare the effects of market volatilities on Nabors Industries and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and SNDL.
Diversification Opportunities for Nabors Industries and SNDL
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nabors and SNDL is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Nabors Industries i.e., Nabors Industries and SNDL go up and down completely randomly.
Pair Corralation between Nabors Industries and SNDL
Considering the 90-day investment horizon Nabors Industries is expected to under-perform the SNDL. But the stock apears to be less risky and, when comparing its historical volatility, Nabors Industries is 1.19 times less risky than SNDL. The stock trades about -0.02 of its potential returns per unit of risk. The SNDL Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 261.00 in SNDL Inc on August 29, 2024 and sell it today you would lose (65.00) from holding SNDL Inc or give up 24.9% 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. SNDL Inc
Performance |
| Timeline |
| Nabors Industries |
| SNDL Inc |
Nabors Industries and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and SNDL
The main advantage of trading using opposite Nabors Industries and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL's long position.| Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Patterson UTI Energy | 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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