Correlation Between Awilco Drilling and SFL
Can any of the company-specific risk be diversified away by investing in both Awilco Drilling and SFL 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 Awilco Drilling and SFL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Awilco Drilling PLC and SFL Corporation, you can compare the effects of market volatilities on Awilco Drilling and SFL 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 Awilco Drilling with a short position of SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Awilco Drilling and SFL.
Diversification Opportunities for Awilco Drilling and SFL
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Awilco and SFL is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Awilco Drilling PLC and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and Awilco 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 Awilco Drilling PLC are associated (or correlated) with SFL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFL Corporation has no effect on the direction of Awilco Drilling i.e., Awilco Drilling and SFL go up and down completely randomly.
Pair Corralation between Awilco Drilling and SFL
Assuming the 90 days horizon Awilco Drilling PLC is expected to under-perform the SFL. But the otc stock apears to be less risky and, when comparing its historical volatility, Awilco Drilling PLC is 2.8 times less risky than SFL. The otc stock trades about -0.21 of its potential returns per unit of risk. The SFL Corporation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,017 in SFL Corporation on September 12, 2024 and sell it today you would earn a total of 22.00 from holding SFL Corporation or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Awilco Drilling PLC vs. SFL Corp.
Performance |
| Timeline |
| Awilco Drilling PLC |
| SFL Corporation |
Awilco Drilling and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Awilco Drilling and SFL
The main advantage of trading using opposite Awilco Drilling and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Awilco Drilling position performs unexpectedly, SFL 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 SFL will offset losses from the drop in SFL's long position.| Awilco Drilling vs. Noble plc | Awilco Drilling vs. Transocean | Awilco Drilling vs. Helmerich and Payne | Awilco Drilling vs. Patterson UTI Energy |
Check out your portfolio center.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |