Correlation Between BORR DRILLING and Granite Construction
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and Granite Construction 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 Granite Construction 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 Granite Construction, you can compare the effects of market volatilities on BORR DRILLING and Granite Construction 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 Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and Granite Construction.
Diversification Opportunities for BORR DRILLING and Granite Construction
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BORR and Granite is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction 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 Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and Granite Construction go up and down completely randomly.
Pair Corralation between BORR DRILLING and Granite Construction
Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the Granite Construction. In addition to that, BORR DRILLING is 1.8 times more volatile than Granite Construction. It trades about -0.04 of its total potential returns per unit of risk. Granite Construction is currently generating about 0.15 per unit of volatility. If you would invest 4,344 in Granite Construction on November 3, 2024 and sell it today you would earn a total of 4,106 from holding Granite Construction or generate 94.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. Granite Construction
Performance |
| Timeline |
| BORR DRILLING NEW |
| Granite Construction |
BORR DRILLING and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and Granite Construction
The main advantage of trading using opposite BORR DRILLING and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, Granite Construction 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 Granite Construction will offset losses from the drop in Granite Construction's long position.| BORR DRILLING vs. CANON MARKETING JP | BORR DRILLING vs. Coffee Holding Co | BORR DRILLING vs. Scottish Mortgage Investment | BORR DRILLING vs. CarsalesCom |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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