Correlation Between Nabors Energy and CDW Corp

Can any of the company-specific risk be diversified away by investing in both Nabors Energy and CDW Corp 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 CDW Corp 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 CDW Corp, you can compare the effects of market volatilities on Nabors Energy and CDW Corp 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 CDW Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Energy and CDW Corp.

Diversification Opportunities for Nabors Energy and CDW Corp

-0.69

Correlation Coefficient

Nabors Energy  CDW Corp

Excellent diversification

The 3 months correlation between Nabors and CDW is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corp 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 CDW Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corp has no effect on the direction of Nabors Energy i.e., Nabors Energy and CDW Corp go up and down completely randomly.

Pair Corralation between Nabors Energy and CDW Corp

Given the investment horizon of 90 days Nabors Energy Transition is expected to generate 0.23 times more return on investment than CDW Corp. However, Nabors Energy Transition is 4.28 times less risky than CDW Corp. It trades about 0.11 of its potential returns per unit of risk. CDW Corp is currently generating about -0.08 per unit of risk. If you would invest  1,104  in Nabors Energy Transition on May 29, 2025 and sell it today you would earn a total of  27.00  from holding Nabors Energy Transition or generate 2.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.16%
Values	Daily Returns

Nabors Energy Transition  vs.  CDW Corp

Nabors Energy Transition

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Nabors Energy is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

CDW Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days CDW Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Nabors Energy and CDW Corp

The main advantage of trading using opposite Nabors Energy and CDW Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Energy position performs unexpectedly, CDW Corp 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 CDW Corp will offset losses from the drop in CDW Corp's long position.

The idea behind Nabors Energy Transition and CDW Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.