Correlation Between Siamgas and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both Siamgas 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 Siamgas and BORR DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siamgas And Petrochemicals and BORR DRILLING NEW, you can compare the effects of market volatilities on Siamgas 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 Siamgas with a short position of BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and BORR DRILLING.
Diversification Opportunities for Siamgas and BORR DRILLING
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Siamgas and BORR is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals 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 Siamgas 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 Siamgas And Petrochemicals 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 Siamgas i.e., Siamgas and BORR DRILLING go up and down completely randomly.
Pair Corralation between Siamgas and BORR DRILLING
Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 0.64 times more return on investment than BORR DRILLING. However, Siamgas And Petrochemicals is 1.57 times less risky than BORR DRILLING. It trades about 0.01 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about -0.02 per unit of risk. If you would invest 18.00 in Siamgas And Petrochemicals on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Siamgas And Petrochemicals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siamgas And Petrochemicals vs. BORR DRILLING NEW
Performance |
| Timeline |
| Siamgas And Petroche |
| BORR DRILLING NEW |
Siamgas and BORR DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and BORR DRILLING
The main advantage of trading using opposite Siamgas and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas 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.The idea behind Siamgas And Petrochemicals and BORR DRILLING NEW 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.| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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