Correlation Between Nextier Oilfield and Naas Technology

Can any of the company-specific risk be diversified away by investing in both Nextier Oilfield and Naas Technology 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 Nextier Oilfield and Naas Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nextier Oilfield Solutions and Naas Technology ADR, you can compare the effects of market volatilities on Nextier Oilfield and Naas Technology 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 Nextier Oilfield with a short position of Naas Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextier Oilfield and Naas Technology.

Diversification Opportunities for Nextier Oilfield and Naas Technology

-0.46

Correlation Coefficient

Nextier Oilfield  Naas Technology

Very good diversification

The 3 months correlation between Nextier and Naas is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nextier Oilfield Solutions and Naas Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naas Technology ADR and Nextier Oilfield 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 Nextier Oilfield Solutions are associated (or correlated) with Naas Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naas Technology ADR has no effect on the direction of Nextier Oilfield i.e., Nextier Oilfield and Naas Technology go up and down completely randomly.

Pair Corralation between Nextier Oilfield and Naas Technology

If you would invest  1,061  in Nextier Oilfield Solutions on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Nextier Oilfield Solutions or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	2.33%
Values	Daily Returns

Nextier Oilfield Solutions  vs.  Naas Technology ADR

Nextier Oilfield Sol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextier Oilfield Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Nextier Oilfield is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Naas Technology ADR

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nextier Oilfield and Naas Technology

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

The idea behind Nextier Oilfield Solutions and Naas Technology ADR 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.