Correlation Between Borr Drilling and Laramide Resources
Can any of the company-specific risk be diversified away by investing in both Borr Drilling and Laramide Resources 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 Laramide Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borr Drilling and Laramide Resources, you can compare the effects of market volatilities on Borr Drilling and Laramide Resources 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 Laramide Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borr Drilling and Laramide Resources.
Diversification Opportunities for Borr Drilling and Laramide Resources
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Borr and Laramide is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Borr Drilling and Laramide Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laramide Resources 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 Laramide Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laramide Resources has no effect on the direction of Borr Drilling i.e., Borr Drilling and Laramide Resources go up and down completely randomly.
Pair Corralation between Borr Drilling and Laramide Resources
Given the investment horizon of 90 days Borr Drilling is expected to under-perform the Laramide Resources. In addition to that, Borr Drilling is 1.09 times more volatile than Laramide Resources. It trades about -0.13 of its total potential returns per unit of risk. Laramide Resources is currently generating about -0.04 per unit of volatility. If you would invest 53.00 in Laramide Resources on September 4, 2024 and sell it today you would lose (2.00) from holding Laramide Resources or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Borr Drilling vs. Laramide Resources
Performance |
| Timeline |
| Borr Drilling |
| Laramide Resources |
Borr Drilling and Laramide Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borr Drilling and Laramide Resources
The main advantage of trading using opposite Borr Drilling and Laramide Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borr Drilling position performs unexpectedly, Laramide Resources 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 Laramide Resources will offset losses from the drop in Laramide Resources' long position.| Borr Drilling vs. Noble plc | Borr Drilling vs. Patterson UTI Energy | Borr Drilling vs. Nabors Industries | Borr Drilling vs. Seadrill Limited |
| Laramide Resources vs. Seadrill Limited | Laramide Resources vs. Noble plc | Laramide Resources vs. Borr Drilling | Laramide Resources vs. SCOR PK |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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