Correlation Between Guangdong Investment and BORR DRILLING

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

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

Diversification Opportunities for Guangdong Investment and BORR DRILLING

0.24

Correlation Coefficient

Guangdong Investment  BORR DRILLING

Modest diversification

The 3 months correlation between Guangdong and BORR is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited 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 Guangdong Investment 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 Guangdong Investment Limited 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 Guangdong Investment i.e., Guangdong Investment and BORR DRILLING go up and down completely randomly.

Pair Corralation between Guangdong Investment and BORR DRILLING

Assuming the 90 days horizon Guangdong Investment is expected to generate 1.33 times less return on investment than BORR DRILLING. But when comparing it to its historical volatility, Guangdong Investment Limited is 2.26 times less risky than BORR DRILLING. It trades about 0.07 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  157.00  in BORR DRILLING NEW on April 24, 2025 and sell it today you would earn a total of  10.00  from holding BORR DRILLING NEW or generate 6.37% return on investment over 90 days.

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

Guangdong Investment Limited  vs.  BORR DRILLING NEW

Guangdong Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Investment Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Guangdong Investment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

BORR DRILLING NEW

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Guangdong Investment and BORR DRILLING

The main advantage of trading using opposite Guangdong Investment and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment 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 Guangdong Investment Limited 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.