Correlation Between Nabors Industries and Unum
Can any of the company-specific risk be diversified away by investing in both Nabors Industries and Unum 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 Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and Unum Group, you can compare the effects of market volatilities on Nabors Industries and Unum 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 Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and Unum.
Diversification Opportunities for Nabors Industries and Unum
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nabors and Unum is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Nabors Industries i.e., Nabors Industries and Unum go up and down completely randomly.
Pair Corralation between Nabors Industries and Unum
Considering the 90-day investment horizon Nabors Industries is expected to generate 1.01 times less return on investment than Unum. In addition to that, Nabors Industries is 4.95 times more volatile than Unum Group. It trades about 0.04 of its total potential returns per unit of risk. Unum Group is currently generating about 0.22 per unit of volatility. If you would invest 2,455 in Unum Group on September 2, 2024 and sell it today you would earn a total of 74.00 from holding Unum Group or generate 3.01% 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. Unum Group
Performance |
| Timeline |
| Nabors Industries |
| Unum Group |
Nabors Industries and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and Unum
The main advantage of trading using opposite Nabors Industries and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum's long position.| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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