Correlation Between BORR DRILLING and New China
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and New China 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 New China 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 New China Life, you can compare the effects of market volatilities on BORR DRILLING and New China 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 New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and New China.
Diversification Opportunities for BORR DRILLING and New China
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BORR and New is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life 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 New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and New China go up and down completely randomly.
Pair Corralation between BORR DRILLING and New China
Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the New China. But the stock apears to be less risky and, when comparing its historical volatility, BORR DRILLING NEW is 1.76 times less risky than New China. The stock trades about -0.17 of its potential returns per unit of risk. The New China Life is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 165.00 in New China Life on September 2, 2024 and sell it today you would earn a total of 123.00 from holding New China Life or generate 74.55% 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. New China Life
Performance |
| Timeline |
| BORR DRILLING NEW |
| New China Life |
BORR DRILLING and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and New China
The main advantage of trading using opposite BORR DRILLING and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| BORR DRILLING vs. SHELF DRILLING LTD | BORR DRILLING vs. Daldrup Shne Aktiengesellschaft | BORR DRILLING vs. Superior Plus Corp | BORR DRILLING vs. NMI Holdings |
| New China vs. Geely Automobile Holdings | New China vs. Singapore Telecommunications Limited | New China vs. INTERSHOP Communications Aktiengesellschaft | New China vs. INTER CARS SA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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