Correlation Between Granite Falls and Seadrill
Can any of the company-specific risk be diversified away by investing in both Granite Falls and Seadrill 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 Granite Falls and Seadrill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Falls Energy and Seadrill Limited, you can compare the effects of market volatilities on Granite Falls and Seadrill 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 Granite Falls with a short position of Seadrill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Falls and Seadrill.
Diversification Opportunities for Granite Falls and Seadrill
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Granite and Seadrill is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Granite Falls Energy and Seadrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seadrill Limited and Granite Falls 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 Granite Falls Energy are associated (or correlated) with Seadrill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seadrill Limited has no effect on the direction of Granite Falls i.e., Granite Falls and Seadrill go up and down completely randomly.
Pair Corralation between Granite Falls and Seadrill
Given the investment horizon of 90 days Granite Falls Energy is expected to under-perform the Seadrill. But the pink sheet apears to be less risky and, when comparing its historical volatility, Granite Falls Energy is 1.78 times less risky than Seadrill. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Seadrill Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,962 in Seadrill Limited on September 4, 2024 and sell it today you would earn a total of 1,031 from holding Seadrill Limited or generate 34.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Granite Falls Energy vs. Seadrill Limited
Performance |
| Timeline |
| Granite Falls Energy |
| Seadrill Limited |
Granite Falls and Seadrill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Falls and Seadrill
The main advantage of trading using opposite Granite Falls and Seadrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Falls position performs unexpectedly, Seadrill 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 Seadrill will offset losses from the drop in Seadrill's long position.| Granite Falls vs. Asbury Automotive Group | Granite Falls vs. Getty Realty | Granite Falls vs. Grocery Outlet Holding | Granite Falls vs. Tenaris SA ADR |
| Seadrill vs. Precision Drilling | Seadrill vs. Sable Offshore Corp | Seadrill vs. Patterson UTI Energy | Seadrill vs. Borr Drilling |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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