Correlation Between BORR DRILLING and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and Geely Automobile 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 Geely Automobile 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 Geely Automobile Holdings, you can compare the effects of market volatilities on BORR DRILLING and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and Geely Automobile.
Diversification Opportunities for BORR DRILLING and Geely Automobile
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BORR and Geely is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and Geely Automobile go up and down completely randomly.
Pair Corralation between BORR DRILLING and Geely Automobile
Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the Geely Automobile. But the stock apears to be less risky and, when comparing its historical volatility, BORR DRILLING NEW is 1.2 times less risky than Geely Automobile. The stock trades about -0.14 of its potential returns per unit of risk. The Geely Automobile Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Geely Automobile Holdings on September 3, 2024 and sell it today you would earn a total of 65.00 from holding Geely Automobile Holdings or generate 63.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. Geely Automobile Holdings
Performance |
| Timeline |
| BORR DRILLING NEW |
| Geely Automobile Holdings |
BORR DRILLING and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and Geely Automobile
The main advantage of trading using opposite BORR DRILLING and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| BORR DRILLING vs. Patterson UTI Energy | BORR DRILLING vs. PRECISION DRILLING P | BORR DRILLING vs. SHELF DRILLING LTD | BORR DRILLING vs. Daldrup Shne Aktiengesellschaft |
| Geely Automobile vs. Tesla Inc | Geely Automobile vs. Toyota Motor | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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