Correlation Between Xp and Nabors Energy
Can any of the company-specific risk be diversified away by investing in both Xp and Nabors Energy 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 Xp and Nabors Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Nabors Energy Transition, you can compare the effects of market volatilities on Xp and Nabors Energy 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 Xp with a short position of Nabors Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Nabors Energy.
Diversification Opportunities for Xp and Nabors Energy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xp and Nabors is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Nabors Energy Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Energy Transition and Xp 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 Xp Inc are associated (or correlated) with Nabors Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Energy Transition has no effect on the direction of Xp i.e., Xp and Nabors Energy go up and down completely randomly.
Pair Corralation between Xp and Nabors Energy
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Nabors Energy. In addition to that, Xp is 9.6 times more volatile than Nabors Energy Transition. It trades about -0.39 of its total potential returns per unit of risk. Nabors Energy Transition is currently generating about 0.4 per unit of volatility. If you would invest 1,066 in Nabors Energy Transition on September 25, 2024 and sell it today you would earn a total of 29.00 from holding Nabors Energy Transition or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Xp Inc vs. Nabors Energy Transition
Performance |
| Timeline |
| Xp Inc |
| Nabors Energy Transition |
Xp and Nabors Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and Nabors Energy
The main advantage of trading using opposite Xp and Nabors Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, Nabors Energy 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 Energy will offset losses from the drop in Nabors Energy's long position.| Xp vs. Visa Class A | Xp vs. Diamond Hill Investment | Xp vs. Distoken Acquisition | Xp vs. AllianceBernstein Holding LP |
| Nabors Energy vs. Aquagold International | Nabors Energy vs. Morningstar Unconstrained Allocation | Nabors Energy vs. Thrivent High Yield | Nabors Energy vs. Via Renewables |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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