Correlation Between Shoe Carnival and Nabors Industries
Can any of the company-specific risk be diversified away by investing in both Shoe Carnival and Nabors Industries 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 Shoe Carnival and Nabors Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoe Carnival and Nabors Industries, you can compare the effects of market volatilities on Shoe Carnival and Nabors Industries 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 Shoe Carnival with a short position of Nabors Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoe Carnival and Nabors Industries.
Diversification Opportunities for Shoe Carnival and Nabors Industries
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shoe and Nabors is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and Nabors Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Industries and Shoe Carnival 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 Shoe Carnival are associated (or correlated) with Nabors Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Industries has no effect on the direction of Shoe Carnival i.e., Shoe Carnival and Nabors Industries go up and down completely randomly.
Pair Corralation between Shoe Carnival and Nabors Industries
Given the investment horizon of 90 days Shoe Carnival is expected to under-perform the Nabors Industries. But the stock apears to be less risky and, when comparing its historical volatility, Shoe Carnival is 1.53 times less risky than Nabors Industries. The stock trades about -0.03 of its potential returns per unit of risk. The Nabors Industries is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,910 in Nabors Industries on September 1, 2024 and sell it today you would earn a total of 433.00 from holding Nabors Industries or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shoe Carnival vs. Nabors Industries
Performance |
| Timeline |
| Shoe Carnival |
| Nabors Industries |
Shoe Carnival and Nabors Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoe Carnival and Nabors Industries
The main advantage of trading using opposite Shoe Carnival and Nabors Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoe Carnival position performs unexpectedly, Nabors Industries 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 Nabors Industries will offset losses from the drop in Nabors Industries' long position.| Shoe Carnival vs. Citi Trends | Shoe Carnival vs. Zumiez Inc | Shoe Carnival vs. Buckle Inc | Shoe Carnival vs. Cato Corporation |
| Nabors Industries vs. Borr Drilling | Nabors Industries vs. Patterson UTI Energy | Nabors Industries vs. Noble plc | Nabors Industries vs. Helmerich and Payne |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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