Correlation Between Nabors Energy and East West
Can any of the company-specific risk be diversified away by investing in both Nabors Energy and East West 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 Energy and East West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Energy Transition and East West Petroleum, you can compare the effects of market volatilities on Nabors Energy and East West 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 Energy with a short position of East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Energy and East West.
Diversification Opportunities for Nabors Energy and East West
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nabors and East is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and East West Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Petroleum and Nabors Energy 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 Energy Transition are associated (or correlated) with East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Petroleum has no effect on the direction of Nabors Energy i.e., Nabors Energy and East West go up and down completely randomly.
Pair Corralation between Nabors Energy and East West
Assuming the 90 days horizon Nabors Energy is expected to generate 3.25 times less return on investment than East West. But when comparing it to its historical volatility, Nabors Energy Transition is 61.46 times less risky than East West. It trades about 0.39 of its potential returns per unit of risk. East West Petroleum is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4.00 in East West Petroleum on September 28, 2024 and sell it today you would lose (1.00) from holding East West Petroleum or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nabors Energy Transition vs. East West Petroleum
Performance |
| Timeline |
| Nabors Energy Transition |
| East West Petroleum |
Nabors Energy and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Energy and East West
The main advantage of trading using opposite Nabors Energy and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Energy position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.| Nabors Energy vs. Aquagold International | Nabors Energy vs. Morningstar Unconstrained Allocation | Nabors Energy vs. Thrivent High Yield | Nabors Energy vs. Via Renewables |
| East West vs. Valeura Energy | East West vs. Invictus Energy Limited | East West vs. ConnectOne Bancorp | East West vs. RCM Technologies |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stocks Directory Find actively traded stocks across global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |