Correlation Between QUEEN S and BORR DRILLING

Can any of the company-specific risk be diversified away by investing in both QUEEN S 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 QUEEN S and BORR DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between QUEEN S ROAD and BORR DRILLING NEW, you can compare the effects of market volatilities on QUEEN S 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 QUEEN S with a short position of BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUEEN S and BORR DRILLING.

Diversification Opportunities for QUEEN S and BORR DRILLING

-0.31

Correlation Coefficient

QUEEN S  BORR DRILLING

Very good diversification

The 3 months correlation between QUEEN and BORR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD 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 QUEEN S 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 QUEEN S ROAD 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 QUEEN S i.e., QUEEN S and BORR DRILLING go up and down completely randomly.

Pair Corralation between QUEEN S and BORR DRILLING

Assuming the 90 days horizon QUEEN S ROAD is expected to under-perform the BORR DRILLING. But the stock apears to be less risky and, when comparing its historical volatility, QUEEN S ROAD is 1.14 times less risky than BORR DRILLING. The stock trades about -0.24 of its potential returns per unit of risk. The BORR DRILLING NEW is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  355.00  in BORR DRILLING NEW on October 11, 2024 and sell it today you would earn a total of  33.00  from holding BORR DRILLING NEW or generate 9.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

QUEEN S ROAD  vs.  BORR DRILLING NEW

QUEEN S ROAD

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in QUEEN S ROAD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, QUEEN S reported solid returns over the last few months and may actually be approaching a breakup point.

BORR DRILLING NEW

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BORR DRILLING NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with QUEEN S and BORR DRILLING

The main advantage of trading using opposite QUEEN S and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUEEN S 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.

The idea behind QUEEN S ROAD and BORR DRILLING NEW pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.