Correlation Between Aspen Aerogels and Nabors Energy

Can any of the company-specific risk be diversified away by investing in both Aspen Aerogels 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 Aspen Aerogels and Nabors Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aspen Aerogels and Nabors Energy Transition, you can compare the effects of market volatilities on Aspen Aerogels 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 Aspen Aerogels with a short position of Nabors Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Aerogels and Nabors Energy.

Diversification Opportunities for Aspen Aerogels and Nabors Energy

-0.01

Correlation Coefficient

Aspen Aerogels  Nabors Energy

Good diversification

The 3 months correlation between Aspen and Nabors is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Aerogels 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 Aspen Aerogels 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 Aspen Aerogels 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 Aspen Aerogels i.e., Aspen Aerogels and Nabors Energy go up and down completely randomly.

Pair Corralation between Aspen Aerogels and Nabors Energy

Given the investment horizon of 90 days Aspen Aerogels is expected to generate 0.22 times more return on investment than Nabors Energy. However, Aspen Aerogels is 4.46 times less risky than Nabors Energy. It trades about 0.05 of its potential returns per unit of risk. Nabors Energy Transition is currently generating about 0.0 per unit of risk. If you would invest  634.00  in Aspen Aerogels on July 2, 2025 and sell it today you would earn a total of  52.50  from holding Aspen Aerogels or generate 8.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

Aspen Aerogels  vs.  Nabors Energy Transition

Aspen Aerogels

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Aspen Aerogels are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aspen Aerogels displayed solid returns over the last few months and may actually be approaching a breakup point.

Nabors Energy Transition

Risk-Adjusted Performance

Weakest

Over the last 90 days Nabors Energy Transition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Nabors Energy is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Aspen Aerogels and Nabors Energy

The main advantage of trading using opposite Aspen Aerogels and Nabors Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Aerogels 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.

The idea behind Aspen Aerogels and Nabors Energy Transition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.