Correlation Between Nib Holdings and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both Nib Holdings and BORR 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 Nib Holdings and BORR DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between nib holdings limited and BORR DRILLING NEW, you can compare the effects of market volatilities on Nib Holdings and BORR 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 Nib Holdings with a short position of BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nib Holdings and BORR DRILLING.
Diversification Opportunities for Nib Holdings and BORR DRILLING
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nib and BORR is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding nib holdings limited and BORR DRILLING NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BORR DRILLING NEW and Nib Holdings 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 nib holdings limited are associated (or correlated) with BORR DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BORR DRILLING NEW has no effect on the direction of Nib Holdings i.e., Nib Holdings and BORR DRILLING go up and down completely randomly.
Pair Corralation between Nib Holdings and BORR DRILLING
Assuming the 90 days horizon nib holdings limited is expected to generate 0.65 times more return on investment than BORR DRILLING. However, nib holdings limited is 1.54 times less risky than BORR DRILLING. It trades about -0.03 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about -0.04 per unit of risk. If you would invest 417.00 in nib holdings limited on September 14, 2024 and sell it today you would lose (85.00) from holding nib holdings limited or give up 20.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
nib holdings limited vs. BORR DRILLING NEW
Performance |
| Timeline |
| nib holdings limited |
| BORR DRILLING NEW |
Nib Holdings and BORR DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nib Holdings and BORR DRILLING
The main advantage of trading using opposite Nib Holdings and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nib Holdings position performs unexpectedly, BORR 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 BORR DRILLING will offset losses from the drop in BORR DRILLING's long position.| Nib Holdings vs. CVS Health | Nib Holdings vs. SHIP HEALTHCARE HLDGINC | Nib Holdings vs. EPSILON HEALTHCARE LTD | Nib Holdings vs. ASSOC BR FOODS |
| BORR DRILLING vs. MAVEN WIRELESS SWEDEN | BORR DRILLING vs. Dairy Farm International | BORR DRILLING vs. CITY OFFICE REIT | BORR DRILLING vs. Tyson Foods |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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