Correlation Between Nabors Industries and NOVARTIS
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By analyzing existing cross correlation between Nabors Industries and NOVARTIS CAP P, you can compare the effects of market volatilities on Nabors Industries and NOVARTIS 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 NOVARTIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and NOVARTIS.
Diversification Opportunities for Nabors Industries and NOVARTIS
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nabors and NOVARTIS is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and NOVARTIS CAP P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVARTIS CAP P 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 NOVARTIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVARTIS CAP P has no effect on the direction of Nabors Industries i.e., Nabors Industries and NOVARTIS go up and down completely randomly.
Pair Corralation between Nabors Industries and NOVARTIS
Considering the 90-day investment horizon Nabors Industries is expected to under-perform the NOVARTIS. But the stock apears to be less risky and, when comparing its historical volatility, Nabors Industries is 23.24 times less risky than NOVARTIS. The stock trades about -0.02 of its potential returns per unit of risk. The NOVARTIS CAP P is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,225 in NOVARTIS CAP P on August 26, 2024 and sell it today you would earn a total of 35.00 from holding NOVARTIS CAP P or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.45% |
| Values | Daily Returns |
Nabors Industries vs. NOVARTIS CAP P
Performance |
| Timeline |
| Nabors Industries |
| NOVARTIS CAP P |
Nabors Industries and NOVARTIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and NOVARTIS
The main advantage of trading using opposite Nabors Industries and NOVARTIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries position performs unexpectedly, NOVARTIS 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 NOVARTIS will offset losses from the drop in NOVARTIS's long position.| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Borr Drilling |
| NOVARTIS vs. Noble plc | NOVARTIS vs. Nabors Industries | NOVARTIS vs. Fevertree Drinks Plc | NOVARTIS vs. National Beverage Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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