Correlation Between BORR DRILLING and Bausch Health
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and Bausch Health 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 Bausch Health 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 Bausch Health Companies, you can compare the effects of market volatilities on BORR DRILLING and Bausch Health 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 Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and Bausch Health.
Diversification Opportunities for BORR DRILLING and Bausch Health
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BORR and Bausch is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies 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 Bausch Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and Bausch Health go up and down completely randomly.
Pair Corralation between BORR DRILLING and Bausch Health
Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the Bausch Health. But the stock apears to be less risky and, when comparing its historical volatility, BORR DRILLING NEW is 1.05 times less risky than Bausch Health. The stock trades about -0.02 of its potential returns per unit of risk. The Bausch Health Companies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 623.00 in Bausch Health Companies on September 14, 2024 and sell it today you would earn a total of 171.00 from holding Bausch Health Companies or generate 27.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. Bausch Health Companies
Performance |
| Timeline |
| BORR DRILLING NEW |
| Bausch Health Companies |
BORR DRILLING and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and Bausch Health
The main advantage of trading using opposite BORR DRILLING and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, Bausch Health 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 Bausch Health will offset losses from the drop in Bausch Health'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 |
| Bausch Health vs. Shionogi Co | Bausch Health vs. Dr Reddys Laboratories | Bausch Health vs. Superior Plus Corp | Bausch Health vs. NMI Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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