Correlation Between BORR DRILLING and Western Copper

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

By analyzing existing cross correlation between BORR DRILLING NEW and Western Copper and, you can compare the effects of market volatilities on BORR DRILLING and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and Western Copper.

Diversification Opportunities for BORR DRILLING and Western Copper

0.52

Correlation Coefficient

BORR DRILLING  Western Copper

Very weak diversification

The 3 months correlation between BORR and Western is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 NEW are associated (or correlated) with Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of BORR DRILLING i.e., BORR DRILLING and Western Copper go up and down completely randomly.

Pair Corralation between BORR DRILLING and Western Copper

Assuming the 90 days horizon BORR DRILLING NEW is expected to under-perform the Western Copper. In addition to that, BORR DRILLING is 1.15 times more volatile than Western Copper and. It trades about -0.07 of its total potential returns per unit of risk. Western Copper and is currently generating about -0.03 per unit of volatility. If you would invest  114.00  in Western Copper and on September 21, 2024 and sell it today you would lose (18.00) from holding Western Copper and or give up 15.79% of portfolio value over 90 days.

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

BORR DRILLING NEW  vs.  Western Copper and

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Western Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Copper and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with BORR DRILLING and Western Copper

The main advantage of trading using opposite BORR DRILLING and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.

The idea behind BORR DRILLING NEW and Western Copper and 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.