Correlation Between NEXA RESOURCES and SHELF DRILLING

Can any of the company-specific risk be diversified away by investing in both NEXA RESOURCES and SHELF DRILLING 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 NEXA RESOURCES and SHELF DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NEXA RESOURCES SA and SHELF DRILLING LTD, you can compare the effects of market volatilities on NEXA RESOURCES and SHELF DRILLING 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 NEXA RESOURCES with a short position of SHELF DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXA RESOURCES and SHELF DRILLING.

Diversification Opportunities for NEXA RESOURCES and SHELF DRILLING

-0.75

Correlation Coefficient

NEXA RESOURCES  SHELF DRILLING

Pay attention - limited upside

The 3 months correlation between NEXA and SHELF is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding NEXA RESOURCES SA and SHELF DRILLING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHELF DRILLING LTD and NEXA RESOURCES 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 NEXA RESOURCES SA are associated (or correlated) with SHELF DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHELF DRILLING LTD has no effect on the direction of NEXA RESOURCES i.e., NEXA RESOURCES and SHELF DRILLING go up and down completely randomly.

Pair Corralation between NEXA RESOURCES and SHELF DRILLING

Assuming the 90 days horizon NEXA RESOURCES SA is expected to under-perform the SHELF DRILLING. But the stock apears to be less risky and, when comparing its historical volatility, NEXA RESOURCES SA is 1.87 times less risky than SHELF DRILLING. The stock trades about -0.13 of its potential returns per unit of risk. The SHELF DRILLING LTD is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  49.00  in SHELF DRILLING LTD on April 23, 2025 and sell it today you would earn a total of  17.00  from holding SHELF DRILLING LTD or generate 34.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

NEXA RESOURCES SA  vs.  SHELF DRILLING LTD

NEXA RESOURCES SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEXA RESOURCES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SHELF DRILLING LTD

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SHELF DRILLING LTD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SHELF DRILLING reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NEXA RESOURCES and SHELF DRILLING

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

The idea behind NEXA RESOURCES SA and SHELF DRILLING LTD 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.