Correlation Between SALESFORCE and Borr Drilling

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

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

Diversification Opportunities for SALESFORCE and Borr Drilling

0.34

Correlation Coefficient

SALESFORCE  Borr Drilling

Weak diversification

The 3 months correlation between SALESFORCE and Borr is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SALESFORCE INC 37 and Borr Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borr Drilling and SALESFORCE 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 SALESFORCE INC 37 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 has no effect on the direction of SALESFORCE i.e., SALESFORCE and Borr Drilling go up and down completely randomly.

Pair Corralation between SALESFORCE and Borr Drilling

Assuming the 90 days trading horizon SALESFORCE INC 37 is expected to generate 0.08 times more return on investment than Borr Drilling. However, SALESFORCE INC 37 is 12.87 times less risky than Borr Drilling. It trades about -0.13 of its potential returns per unit of risk. Borr Drilling is currently generating about -0.08 per unit of risk. If you would invest  9,792  in SALESFORCE INC 37 on October 26, 2024 and sell it today you would lose (206.00) from holding SALESFORCE INC 37 or give up 2.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

SALESFORCE INC 37  vs.  Borr Drilling

SALESFORCE INC 37

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SALESFORCE INC 37 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SALESFORCE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Borr Drilling

Risk-Adjusted Performance

0 of 100

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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with SALESFORCE and Borr Drilling

The main advantage of trading using opposite SALESFORCE and Borr Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALESFORCE 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 SALESFORCE INC 37 and Borr Drilling 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 CEOs Directory module to screen CEOs from public companies around the world.