Correlation Between Borr Drilling and Hitachi Metals
Can any of the company-specific risk be diversified away by investing in both Borr Drilling and Hitachi Metals 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 Hitachi Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borr Drilling and Hitachi Metals, you can compare the effects of market volatilities on Borr Drilling and Hitachi Metals 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 Hitachi Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borr Drilling and Hitachi Metals.
Diversification Opportunities for Borr Drilling and Hitachi Metals
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Borr and Hitachi is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Borr Drilling and Hitachi Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Metals 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 are associated (or correlated) with Hitachi Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Metals has no effect on the direction of Borr Drilling i.e., Borr Drilling and Hitachi Metals go up and down completely randomly.
Pair Corralation between Borr Drilling and Hitachi Metals
If you would invest 5,100 in Hitachi Metals on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Hitachi Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Borr Drilling vs. Hitachi Metals
Performance |
| Timeline |
| Borr Drilling |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Borr Drilling and Hitachi Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borr Drilling and Hitachi Metals
The main advantage of trading using opposite Borr Drilling and Hitachi Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borr Drilling position performs unexpectedly, Hitachi Metals 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 Hitachi Metals will offset losses from the drop in Hitachi Metals' long position.| Borr Drilling vs. Noble plc | Borr Drilling vs. Patterson UTI Energy | Borr Drilling vs. Nabors Industries | Borr Drilling vs. Seadrill Limited |
| Hitachi Metals vs. JBG SMITH Properties | Hitachi Metals vs. Grupo Simec SAB | Hitachi Metals vs. ArcelorMittal SA ADR | Hitachi Metals vs. HUHUTECH International Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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