Correlation Between Nabors Energy and NH Foods
Can any of the company-specific risk be diversified away by investing in both Nabors Energy and NH Foods 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 NH Foods 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 NH Foods Ltd, you can compare the effects of market volatilities on Nabors Energy and NH Foods 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 NH Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Energy and NH Foods.
Diversification Opportunities for Nabors Energy and NH Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nabors and NIPMY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and NH Foods Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Foods 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 NH Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Foods has no effect on the direction of Nabors Energy i.e., Nabors Energy and NH Foods go up and down completely randomly.
Pair Corralation between Nabors Energy and NH Foods
Assuming the 90 days horizon Nabors Energy is expected to generate 1.96 times less return on investment than NH Foods. But when comparing it to its historical volatility, Nabors Energy Transition is 2.04 times less risky than NH Foods. It trades about 0.08 of its potential returns per unit of risk. NH Foods Ltd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,418 in NH Foods Ltd on October 31, 2024 and sell it today you would earn a total of 282.00 from holding NH Foods Ltd or generate 19.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 78.7% |
| Values | Daily Returns |
Nabors Energy Transition vs. NH Foods Ltd
Performance |
| Timeline |
| Nabors Energy Transition |
| NH Foods |
Nabors Energy and NH Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Energy and NH Foods
The main advantage of trading using opposite Nabors Energy and NH Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Energy position performs unexpectedly, NH Foods 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 NH Foods will offset losses from the drop in NH Foods' long position.| Nabors Energy vs. Blue Owl Capital | Nabors Energy vs. TPG Inc | Nabors Energy vs. Patria Investments | Nabors Energy vs. Cion Investment 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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