Correlation Between Borr Drilling and SALESFORCE

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

By analyzing existing cross correlation between Borr Drilling and SALESFORCE INC 37, you can compare the effects of market volatilities on Borr Drilling and SALESFORCE 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 SALESFORCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borr Drilling and SALESFORCE.

Diversification Opportunities for Borr Drilling and SALESFORCE

-0.53

Correlation Coefficient

Borr Drilling  SALESFORCE

Excellent diversification

The 3 months correlation between Borr and SALESFORCE is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Borr Drilling and SALESFORCE INC 37 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SALESFORCE INC 37 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 are associated (or correlated) with SALESFORCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SALESFORCE INC 37 has no effect on the direction of Borr Drilling i.e., Borr Drilling and SALESFORCE go up and down completely randomly.

Pair Corralation between Borr Drilling and SALESFORCE

Given the investment horizon of 90 days Borr Drilling is expected to under-perform the SALESFORCE. In addition to that, Borr Drilling is 7.82 times more volatile than SALESFORCE INC 37. It trades about -0.21 of its total potential returns per unit of risk. SALESFORCE INC 37 is currently generating about 0.07 per unit of volatility. If you would invest  9,711  in SALESFORCE INC 37 on December 23, 2024 and sell it today you would earn a total of  171.00  from holding SALESFORCE INC 37 or generate 1.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Borr Drilling  vs.  SALESFORCE INC 37

Borr Drilling

Risk-Adjusted Performance

Very Weak

Over the last 90 days Borr Drilling has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

SALESFORCE INC 37

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SALESFORCE INC 37 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SALESFORCE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Borr Drilling and SALESFORCE

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

The idea behind Borr Drilling and SALESFORCE INC 37 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.