Correlation Between Nabors Energy and CVW CleanTech
Can any of the company-specific risk be diversified away by investing in both Nabors Energy and CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech, you can compare the effects of market volatilities on Nabors Energy and CVW CleanTech 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 CVW CleanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Energy and CVW CleanTech.
Diversification Opportunities for Nabors Energy and CVW CleanTech
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nabors and CVW is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and CVW CleanTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CleanTech 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 CVW CleanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CleanTech has no effect on the direction of Nabors Energy i.e., Nabors Energy and CVW CleanTech go up and down completely randomly.
Pair Corralation between Nabors Energy and CVW CleanTech
Assuming the 90 days horizon Nabors Energy Transition is expected to generate 8.84 times more return on investment than CVW CleanTech. However, Nabors Energy is 8.84 times more volatile than CVW CleanTech. It trades about 0.26 of its potential returns per unit of risk. CVW CleanTech is currently generating about 0.21 per unit of risk. If you would invest 10.00 in Nabors Energy Transition on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Nabors Energy Transition or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Nabors Energy Transition vs. CVW CleanTech
Performance |
| Timeline |
| Nabors Energy Transition |
| CVW CleanTech |
Nabors Energy and CVW CleanTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Energy and CVW CleanTech
The main advantage of trading using opposite Nabors Energy and CVW CleanTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Energy position performs unexpectedly, CVW CleanTech 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 CVW CleanTech will offset losses from the drop in CVW CleanTech's long position.| Nabors Energy vs. Agnico Eagle Mines | Nabors Energy vs. Allegheny Technologies Incorporated | Nabors Energy vs. BJs Restaurants | Nabors Energy vs. Osaka Steel Co, |
| CVW CleanTech vs. Wabash National | CVW CleanTech vs. BCB Bancorp | CVW CleanTech vs. Commonwealth Bank of | CVW CleanTech vs. Marine Products |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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