Correlation Between BORR DRILLING and Textron
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING and Textron 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 Textron 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 Textron, you can compare the effects of market volatilities on BORR DRILLING and Textron 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 Textron. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and Textron.
Diversification Opportunities for BORR DRILLING and Textron
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BORR and Textron is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and Textron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textron 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 Textron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textron has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and Textron go up and down completely randomly.
Pair Corralation between BORR DRILLING and Textron
Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the Textron. In addition to that, BORR DRILLING is 6.34 times more volatile than Textron. It trades about -0.01 of its total potential returns per unit of risk. Textron is currently generating about 0.32 per unit of volatility. If you would invest 7,364 in Textron on October 22, 2024 and sell it today you would earn a total of 280.00 from holding Textron or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. Textron
Performance |
| Timeline |
| BORR DRILLING NEW |
| Textron |
BORR DRILLING and Textron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and Textron
The main advantage of trading using opposite BORR DRILLING and Textron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, Textron 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 Textron will offset losses from the drop in Textron's long position.| BORR DRILLING vs. Casio Computer CoLtd | BORR DRILLING vs. Tokyu Construction Co | BORR DRILLING vs. Penta Ocean Construction Co | BORR DRILLING vs. CRISPR Therapeutics AG |
| Textron vs. Gladstone Investment | Textron vs. IDP EDUCATION LTD | Textron vs. Japan Asia Investment | Textron vs. HK Electric Investments |
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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