Correlation Between BORR DRILLING and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and Addus HomeCare 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 Addus HomeCare 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 Addus HomeCare, you can compare the effects of market volatilities on BORR DRILLING and Addus HomeCare 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 Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and Addus HomeCare.
Diversification Opportunities for BORR DRILLING and Addus HomeCare
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BORR and Addus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare 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 Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and Addus HomeCare go up and down completely randomly.
Pair Corralation between BORR DRILLING and Addus HomeCare
Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the Addus HomeCare. In addition to that, BORR DRILLING is 1.36 times more volatile than Addus HomeCare. It trades about -0.46 of its total potential returns per unit of risk. Addus HomeCare is currently generating about -0.52 per unit of volatility. If you would invest 12,500 in Addus HomeCare on November 29, 2024 and sell it today you would lose (2,300) from holding Addus HomeCare or give up 18.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. Addus HomeCare
Performance |
| Timeline |
| BORR DRILLING NEW |
| Addus HomeCare |
BORR DRILLING and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and Addus HomeCare
The main advantage of trading using opposite BORR DRILLING and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.| BORR DRILLING vs. SENECA FOODS A | BORR DRILLING vs. Constellation Software | BORR DRILLING vs. FORMPIPE SOFTWARE AB | BORR DRILLING vs. PLANT VEDA FOODS |
| Addus HomeCare vs. VITEC SOFTWARE GROUP | Addus HomeCare vs. Sqs Software Quality | Addus HomeCare vs. CyberArk Software | Addus HomeCare vs. AXWAY SOFTWARE EO |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |