Correlation Between SHIP HEALTHCARE and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and BORR DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and BORR DRILLING NEW, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and BORR DRILLING.
Diversification Opportunities for SHIP HEALTHCARE and BORR DRILLING
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SHIP and BORR is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and BORR DRILLING go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and BORR DRILLING
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 1.12 times more return on investment than BORR DRILLING. However, SHIP HEALTHCARE is 1.12 times more volatile than BORR DRILLING NEW. It trades about 0.07 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 811.00 in SHIP HEALTHCARE HLDGINC on September 14, 2024 and sell it today you would earn a total of 539.00 from holding SHIP HEALTHCARE HLDGINC or generate 66.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. BORR DRILLING NEW
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| BORR DRILLING NEW |
SHIP HEALTHCARE and BORR DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and BORR DRILLING
The main advantage of trading using opposite SHIP HEALTHCARE and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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.| SHIP HEALTHCARE vs. Superior Plus Corp | SHIP HEALTHCARE vs. NMI Holdings | SHIP HEALTHCARE vs. SIVERS SEMICONDUCTORS AB | SHIP HEALTHCARE vs. NorAm Drilling AS |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |