Correlation Between Nabors Industries and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and Townsquare Media 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 Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and Townsquare Media, you can compare the effects of market volatilities on Nabors Industries and Townsquare Media 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 Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and Townsquare Media.
Diversification Opportunities for Nabors Industries and Townsquare Media
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nabors and Townsquare is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media 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 Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Nabors Industries i.e., Nabors Industries and Townsquare Media go up and down completely randomly.
Pair Corralation between Nabors Industries and Townsquare Media
Considering the 90-day investment horizon Nabors Industries is expected to generate 1.07 times more return on investment than Townsquare Media. However, Nabors Industries is 1.07 times more volatile than Townsquare Media. It trades about 0.43 of its potential returns per unit of risk. Townsquare Media is currently generating about -0.11 per unit of risk. If you would invest 5,296 in Nabors Industries on October 24, 2024 and sell it today you would earn a total of 1,375 from holding Nabors Industries or generate 25.96% 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. Townsquare Media
Performance |
| Timeline |
| Nabors Industries |
| Townsquare Media |
Nabors Industries and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and Townsquare Media
The main advantage of trading using opposite Nabors Industries and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, Townsquare Media 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 Townsquare Media will offset losses from the drop in Townsquare Media's long position.| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Borr Drilling |
| Townsquare Media vs. Mirriad Advertising plc | Townsquare Media vs. INEO Tech Corp | Townsquare Media vs. Kidoz Inc | Townsquare Media vs. Marchex |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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