Correlation Between Nabors Energy and Mattel

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

Diversification Opportunities for Nabors Energy and Mattel

-0.64

Correlation Coefficient

Nabors Energy  Mattel

Excellent diversification

The 3 months correlation between Nabors and Mattel is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc 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 Mattel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mattel Inc has no effect on the direction of Nabors Energy i.e., Nabors Energy and Mattel go up and down completely randomly.

Pair Corralation between Nabors Energy and Mattel

Given the investment horizon of 90 days Nabors Energy Transition is expected to generate 0.14 times more return on investment than Mattel. However, Nabors Energy Transition is 7.26 times less risky than Mattel. It trades about 0.08 of its potential returns per unit of risk. Mattel Inc is currently generating about -0.01 per unit of risk. If you would invest  1,104  in Nabors Energy Transition on May 28, 2025 and sell it today you would earn a total of  19.00  from holding Nabors Energy Transition or generate 1.72% 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.  Mattel Inc

Nabors Energy Transition

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 6 (%) 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.

Mattel Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Mattel Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mattel is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nabors Energy and Mattel

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

The idea behind Nabors Energy Transition and Mattel Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..