Correlation Between Erste Group and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both Erste Group and BORR DRILLING 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 Erste Group and BORR DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erste Group Bank and BORR DRILLING NEW, you can compare the effects of market volatilities on Erste Group and BORR DRILLING 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 Erste Group with a short position of BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and BORR DRILLING.
Diversification Opportunities for Erste Group and BORR DRILLING
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Erste and BORR is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and BORR DRILLING NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BORR DRILLING NEW and Erste Group 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 Erste Group Bank are associated (or correlated) with BORR DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BORR DRILLING NEW has no effect on the direction of Erste Group i.e., Erste Group and BORR DRILLING go up and down completely randomly.
Pair Corralation between Erste Group and BORR DRILLING
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.48 times more return on investment than BORR DRILLING. However, Erste Group Bank is 2.09 times less risky than BORR DRILLING. It trades about 0.09 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about -0.02 per unit of risk. If you would invest 3,208 in Erste Group Bank on November 7, 2024 and sell it today you would earn a total of 2,744 from holding Erste Group Bank or generate 85.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.6% |
| Values | Daily Returns |
Erste Group Bank vs. BORR DRILLING NEW
Performance |
| Timeline |
| Erste Group Bank |
| BORR DRILLING NEW |
Erste Group and BORR DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and BORR DRILLING
The main advantage of trading using opposite Erste Group and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, BORR DRILLING 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 BORR DRILLING will offset losses from the drop in BORR DRILLING's long position.| Erste Group vs. GREENX METALS LTD | Erste Group vs. MAGNUM MINING EXP | Erste Group vs. KENEDIX OFFICE INV | Erste Group vs. INVITATION HOMES DL |
| BORR DRILLING vs. UNITED RENTALS | BORR DRILLING vs. Sixt Leasing SE | BORR DRILLING vs. InterContinental Hotels Group | BORR DRILLING vs. Hyatt Hotels |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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