Correlation Between BORR DRILLING and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and AM EAGLE 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 AM EAGLE 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 AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on BORR DRILLING and AM EAGLE 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 AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and AM EAGLE.
Diversification Opportunities for BORR DRILLING and AM EAGLE
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BORR and AFG is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and AM EAGLE OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AM EAGLE OUTFITTERS 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 AM EAGLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AM EAGLE OUTFITTERS has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and AM EAGLE go up and down completely randomly.
Pair Corralation between BORR DRILLING and AM EAGLE
Assuming the 90 days horizon BORR DRILLING is expected to generate 3.11 times less return on investment than AM EAGLE. In addition to that, BORR DRILLING is 1.13 times more volatile than AM EAGLE OUTFITTERS. It trades about 0.01 of its total potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about 0.03 per unit of volatility. If you would invest 1,231 in AM EAGLE OUTFITTERS on September 20, 2024 and sell it today you would earn a total of 389.00 from holding AM EAGLE OUTFITTERS or generate 31.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. AM EAGLE OUTFITTERS
Performance |
| Timeline |
| BORR DRILLING NEW |
| AM EAGLE OUTFITTERS |
BORR DRILLING and AM EAGLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and AM EAGLE
The main advantage of trading using opposite BORR DRILLING and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, AM EAGLE 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 AM EAGLE will offset losses from the drop in AM EAGLE's long position.| BORR DRILLING vs. KRISPY KREME DL 01 | BORR DRILLING vs. Quaker Chemical | BORR DRILLING vs. Universal Display | BORR DRILLING vs. Hemisphere Energy Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |