Correlation Between BORR DRILLING and Lendlease
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on BORR DRILLING and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and Lendlease.
Diversification Opportunities for BORR DRILLING and Lendlease
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BORR and Lendlease is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and Lendlease go up and down completely randomly.
Pair Corralation between BORR DRILLING and Lendlease
Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the Lendlease. In addition to that, BORR DRILLING is 2.84 times more volatile than Lendlease Group. It trades about -0.05 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.21 per unit of volatility. If you would invest 405.00 in Lendlease Group on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Lendlease Group or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. Lendlease Group
Performance |
| Timeline |
| BORR DRILLING NEW |
| Lendlease Group |
BORR DRILLING and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and Lendlease
The main advantage of trading using opposite BORR DRILLING and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| BORR DRILLING vs. PRECISION DRILLING P | BORR DRILLING vs. SHELF DRILLING LTD | BORR DRILLING vs. Daldrup Shne Aktiengesellschaft | BORR DRILLING 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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