Correlation Between BORR DRILLING and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE, you can compare the effects of market volatilities on BORR DRILLING and SBM OFFSHORE 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 SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and SBM OFFSHORE.
Diversification Opportunities for BORR DRILLING and SBM OFFSHORE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BORR and SBM is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE 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 SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between BORR DRILLING and SBM OFFSHORE
Assuming the 90 days horizon BORR DRILLING NEW is expected to generate 2.08 times more return on investment than SBM OFFSHORE. However, BORR DRILLING is 2.08 times more volatile than SBM OFFSHORE. It trades about -0.02 of its potential returns per unit of risk. SBM OFFSHORE is currently generating about -0.07 per unit of risk. If you would invest 377.00 in BORR DRILLING NEW on September 14, 2024 and sell it today you would lose (12.00) from holding BORR DRILLING NEW or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. SBM OFFSHORE
Performance |
| Timeline |
| BORR DRILLING NEW |
| SBM OFFSHORE |
BORR DRILLING and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and SBM OFFSHORE
The main advantage of trading using opposite BORR DRILLING and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, SBM OFFSHORE 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 SBM OFFSHORE will offset losses from the drop in SBM OFFSHORE'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 |
| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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