Correlation Between Nabors Energy and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Nabors Energy and Deutsche Bank 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 Deutsche Bank 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 Deutsche Bank AG, you can compare the effects of market volatilities on Nabors Energy and Deutsche Bank 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 Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Energy and Deutsche Bank.
Diversification Opportunities for Nabors Energy and Deutsche Bank
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nabors and Deutsche is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and Deutsche Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank AG 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 Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank AG has no effect on the direction of Nabors Energy i.e., Nabors Energy and Deutsche Bank go up and down completely randomly.
Pair Corralation between Nabors Energy and Deutsche Bank
Assuming the 90 days horizon Nabors Energy Transition is expected to generate 7.03 times more return on investment than Deutsche Bank. However, Nabors Energy is 7.03 times more volatile than Deutsche Bank AG. It trades about 0.28 of its potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.11 per unit of risk. If you would invest 10.00 in Nabors Energy Transition on September 12, 2024 and sell it today you would earn a total of 6.50 from holding Nabors Energy Transition or generate 65.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Nabors Energy Transition vs. Deutsche Bank AG
Performance |
| Timeline |
| Nabors Energy Transition |
| Deutsche Bank AG |
Nabors Energy and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Energy and Deutsche Bank
The main advantage of trading using opposite Nabors Energy and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Energy position performs unexpectedly, Deutsche Bank 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 Deutsche Bank will offset losses from the drop in Deutsche Bank's long position.| Nabors Energy vs. Citizens | Nabors Energy vs. Trupanion | Nabors Energy vs. QBE Insurance Group | Nabors Energy vs. Relx PLC ADR |
| Deutsche Bank vs. Banco Bradesco SA | Deutsche Bank vs. Itau Unibanco Banco | Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Banco Santander Brasil |
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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