Correlation Between Seadrill and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Seadrill and Canlan Ice 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 Seadrill and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seadrill Limited and Canlan Ice Sports, you can compare the effects of market volatilities on Seadrill and Canlan Ice 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 Seadrill with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seadrill and Canlan Ice.
Diversification Opportunities for Seadrill and Canlan Ice
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seadrill and Canlan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Seadrill Limited and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and Seadrill 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 Seadrill Limited are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Seadrill i.e., Seadrill and Canlan Ice go up and down completely randomly.
Pair Corralation between Seadrill and Canlan Ice
If you would invest 3,935 in Seadrill Limited on September 1, 2024 and sell it today you would earn a total of 129.00 from holding Seadrill Limited or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seadrill Limited vs. Canlan Ice Sports
Performance |
| Timeline |
| Seadrill Limited |
| Canlan Ice Sports |
Seadrill and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seadrill and Canlan Ice
The main advantage of trading using opposite Seadrill and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seadrill position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Seadrill vs. Borr Drilling | Seadrill vs. Patterson UTI Energy | Seadrill vs. Noble plc | Seadrill vs. Helmerich and Payne |
| Canlan Ice vs. Philip Morris International | Canlan Ice vs. Ambev SA ADR | Canlan Ice vs. Japan Tobacco ADR | Canlan Ice vs. Compania Cervecerias Unidas |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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