Correlation Between Forum Energy and Nabors Industries
Can any of the company-specific risk be diversified away by investing in both Forum Energy and Nabors Industries 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 Forum Energy and Nabors Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Energy Technologies and Nabors Industries, you can compare the effects of market volatilities on Forum Energy and Nabors Industries 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 Forum Energy with a short position of Nabors Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Nabors Industries.
Diversification Opportunities for Forum Energy and Nabors Industries
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Forum and Nabors is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Technologies and Nabors Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Industries and Forum 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 Forum Energy Technologies are associated (or correlated) with Nabors Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Industries has no effect on the direction of Forum Energy i.e., Forum Energy and Nabors Industries go up and down completely randomly.
Pair Corralation between Forum Energy and Nabors Industries
Considering the 90-day investment horizon Forum Energy is expected to generate 1.9 times less return on investment than Nabors Industries. But when comparing it to its historical volatility, Forum Energy Technologies is 1.22 times less risky than Nabors Industries. It trades about 0.11 of its potential returns per unit of risk. Nabors Industries is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,158 in Nabors Industries on August 16, 2025 and sell it today you would earn a total of 1,700 from holding Nabors Industries or generate 53.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Energy Technologies vs. Nabors Industries
Performance |
| Timeline |
| Forum Energy Technologies |
| Nabors Industries |
Forum Energy and Nabors Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Nabors Industries
The main advantage of trading using opposite Forum Energy and Nabors Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy position performs unexpectedly, Nabors Industries 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 Industries will offset losses from the drop in Nabors Industries' long position.| Forum Energy vs. Geospace Technologies | Forum Energy vs. Natural Gas Services | Forum Energy vs. WT Offshore | Forum Energy vs. Oil States International |
| Nabors Industries vs. Borr Drilling | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Highpeak Energy Acquisition | Nabors Industries vs. Teekay |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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