Correlation Between S-E BANKEN and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both S-E BANKEN 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 S-E BANKEN and BORR DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between S E BANKEN A and BORR DRILLING NEW, you can compare the effects of market volatilities on S-E BANKEN 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 S-E BANKEN with a short position of BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of S-E BANKEN and BORR DRILLING.
Diversification Opportunities for S-E BANKEN and BORR DRILLING
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between S-E and BORR is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding S E BANKEN A 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 S-E BANKEN 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 S E BANKEN A 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 S-E BANKEN i.e., S-E BANKEN and BORR DRILLING go up and down completely randomly.
Pair Corralation between S-E BANKEN and BORR DRILLING
Assuming the 90 days trading horizon S E BANKEN A is expected to generate 0.56 times more return on investment than BORR DRILLING. However, S E BANKEN A is 1.78 times less risky than BORR DRILLING. It trades about 0.06 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 878.00 in S E BANKEN A on November 7, 2024 and sell it today you would earn a total of 466.00 from holding S E BANKEN A or generate 53.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
S E BANKEN A vs. BORR DRILLING NEW
Performance |
| Timeline |
| S E BANKEN |
| BORR DRILLING NEW |
S-E BANKEN and BORR DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S-E BANKEN and BORR DRILLING
The main advantage of trading using opposite S-E BANKEN and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S-E BANKEN 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.| S-E BANKEN vs. Perseus Mining Limited | S-E BANKEN vs. Alfa Financial Software | S-E BANKEN vs. Wayside Technology Group | S-E BANKEN vs. Take Two Interactive Software |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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