Correlation Between Nabors Energy and Xp

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

Diversification Opportunities for Nabors Energy and Xp

-0.25

Correlation Coefficient

Nabors Energy  Xp

Very good diversification

The 3 months correlation between Nabors and Xp is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Nabors Energy i.e., Nabors Energy and Xp go up and down completely randomly.

Pair Corralation between Nabors Energy and Xp

Given the investment horizon of 90 days Nabors Energy Transition is expected to generate 0.21 times more return on investment than Xp. However, Nabors Energy Transition is 4.69 times less risky than Xp. It trades about 0.04 of its potential returns per unit of risk. Xp Inc is currently generating about -0.02 per unit of risk. If you would invest  1,110  in Nabors Energy Transition on July 1, 2025 and sell it today you would earn a total of  12.00  from holding Nabors Energy Transition or generate 1.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

Nabors Energy Transition  vs.  Xp Inc

Nabors Energy Transition

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 3 (%) 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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Xp Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Xp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Xp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nabors Energy and Xp

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

The idea behind Nabors Energy Transition and Xp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.