Correlation Between Nabors Industries and Stratasys
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and Stratasys 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 Stratasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and Stratasys, you can compare the effects of market volatilities on Nabors Industries and Stratasys 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 Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and Stratasys.
Diversification Opportunities for Nabors Industries and Stratasys
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nabors and Stratasys is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of Nabors Industries i.e., Nabors Industries and Stratasys go up and down completely randomly.
Pair Corralation between Nabors Industries and Stratasys
Considering the 90-day investment horizon Nabors Industries is expected to under-perform the Stratasys. But the stock apears to be less risky and, when comparing its historical volatility, Nabors Industries is 1.22 times less risky than Stratasys. The stock trades about -0.07 of its potential returns per unit of risk. The Stratasys is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 870.00 in Stratasys on November 2, 2024 and sell it today you would earn a total of 69.00 from holding Stratasys or generate 7.93% 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. Stratasys
Performance |
| Timeline |
| Nabors Industries |
| Stratasys |
Nabors Industries and Stratasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and Stratasys
The main advantage of trading using opposite Nabors Industries and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, Stratasys 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 Stratasys will offset losses from the drop in Stratasys' long position.| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Borr Drilling |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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