Correlation Between BORR DRILLING and SHIP HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and SHIP HEALTHCARE 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 BORR DRILLING and SHIP HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BORR DRILLING NEW and SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on BORR DRILLING and SHIP HEALTHCARE 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 BORR DRILLING with a short position of SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and SHIP HEALTHCARE.
Diversification Opportunities for BORR DRILLING and SHIP HEALTHCARE
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BORR and SHIP is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC and BORR DRILLING 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 BORR DRILLING NEW are associated (or correlated) with SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and SHIP HEALTHCARE go up and down completely randomly.
Pair Corralation between BORR DRILLING and SHIP HEALTHCARE
Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the SHIP HEALTHCARE. But the stock apears to be less risky and, when comparing its historical volatility, BORR DRILLING NEW is 1.12 times less risky than SHIP HEALTHCARE. The stock trades about -0.02 of its potential returns per unit of risk. The SHIP HEALTHCARE HLDGINC is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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 |
BORR DRILLING NEW vs. SHIP HEALTHCARE HLDGINC
Performance |
| Timeline |
| BORR DRILLING NEW |
| SHIP HEALTHCARE HLDGINC |
BORR DRILLING and SHIP HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and SHIP HEALTHCARE
The main advantage of trading using opposite BORR DRILLING and SHIP HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, SHIP HEALTHCARE 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 SHIP HEALTHCARE will offset losses from the drop in SHIP HEALTHCARE's long position.| BORR DRILLING vs. MAVEN WIRELESS SWEDEN | BORR DRILLING vs. Dairy Farm International | BORR DRILLING vs. CITY OFFICE REIT | BORR DRILLING vs. Tyson Foods |
| SHIP HEALTHCARE vs. Superior Plus Corp | SHIP HEALTHCARE vs. NMI Holdings | SHIP HEALTHCARE vs. SIVERS SEMICONDUCTORS AB | SHIP HEALTHCARE vs. NorAm Drilling AS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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