Correlation Between BORR DRILLING and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and Solstad 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 Solstad 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 Solstad Offshore ASA, you can compare the effects of market volatilities on BORR DRILLING and Solstad 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 Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and Solstad Offshore.
Diversification Opportunities for BORR DRILLING and Solstad Offshore
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BORR and Solstad is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA 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 Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and Solstad Offshore go up and down completely randomly.
Pair Corralation between BORR DRILLING and Solstad Offshore
Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the Solstad Offshore. In addition to that, BORR DRILLING is 1.09 times more volatile than Solstad Offshore ASA. It trades about -0.08 of its total potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.11 per unit of volatility. If you would invest 271.00 in Solstad Offshore ASA on October 14, 2024 and sell it today you would earn a total of 63.00 from holding Solstad Offshore ASA or generate 23.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. Solstad Offshore ASA
Performance |
| Timeline |
| BORR DRILLING NEW |
| Solstad Offshore ASA |
BORR DRILLING and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and Solstad Offshore
The main advantage of trading using opposite BORR DRILLING and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, Solstad 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| BORR DRILLING vs. Transport International Holdings | BORR DRILLING vs. Molson Coors Beverage | BORR DRILLING vs. SAN MIGUEL BREWERY | BORR DRILLING vs. Broadcom |
| Solstad Offshore vs. URBAN OUTFITTERS | Solstad Offshore vs. GungHo Online Entertainment | Solstad Offshore vs. BORR DRILLING NEW | Solstad Offshore vs. Eidesvik Offshore ASA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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