Correlation Between TFS FINANCIAL and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both TFS FINANCIAL 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 TFS FINANCIAL and BORR DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFS FINANCIAL and BORR DRILLING NEW, you can compare the effects of market volatilities on TFS FINANCIAL 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 TFS FINANCIAL with a short position of BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFS FINANCIAL and BORR DRILLING.
Diversification Opportunities for TFS FINANCIAL and BORR DRILLING
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TFS and BORR is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding TFS FINANCIAL 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 TFS FINANCIAL 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 TFS FINANCIAL 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 TFS FINANCIAL i.e., TFS FINANCIAL and BORR DRILLING go up and down completely randomly.
Pair Corralation between TFS FINANCIAL and BORR DRILLING
Assuming the 90 days trading horizon TFS FINANCIAL is expected to generate 0.64 times more return on investment than BORR DRILLING. However, TFS FINANCIAL is 1.56 times less risky than BORR DRILLING. It trades about 0.17 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about -0.05 per unit of risk. If you would invest 1,210 in TFS FINANCIAL on September 1, 2024 and sell it today you would earn a total of 120.00 from holding TFS FINANCIAL or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFS FINANCIAL vs. BORR DRILLING NEW
Performance |
| Timeline |
| TFS FINANCIAL |
| BORR DRILLING NEW |
TFS FINANCIAL and BORR DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFS FINANCIAL and BORR DRILLING
The main advantage of trading using opposite TFS FINANCIAL and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFS FINANCIAL 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.| TFS FINANCIAL vs. Infrastrutture Wireless Italiane | TFS FINANCIAL vs. Sumitomo Chemical | TFS FINANCIAL vs. Sekisui Chemical Co | TFS FINANCIAL vs. 24SEVENOFFICE GROUP AB |
| BORR DRILLING vs. PRECISION DRILLING P | BORR DRILLING vs. SHELF DRILLING LTD | BORR DRILLING vs. Daldrup Shne Aktiengesellschaft | BORR DRILLING vs. Superior Plus Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| CEOs Directory Screen CEOs from public companies around the world |