Correlation Between Seadrill and Almacenes Xito
Can any of the company-specific risk be diversified away by investing in both Seadrill and Almacenes Xito 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 Almacenes Xito into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seadrill Limited and Almacenes xito SA, you can compare the effects of market volatilities on Seadrill and Almacenes Xito 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 Almacenes Xito. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seadrill and Almacenes Xito.
Diversification Opportunities for Seadrill and Almacenes Xito
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seadrill and Almacenes is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Seadrill Limited and Almacenes xito SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almacenes xito SA 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 Almacenes Xito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almacenes xito SA has no effect on the direction of Seadrill i.e., Seadrill and Almacenes Xito go up and down completely randomly.
Pair Corralation between Seadrill and Almacenes Xito
Given the investment horizon of 90 days Seadrill Limited is expected to generate 0.84 times more return on investment than Almacenes Xito. However, Seadrill Limited is 1.19 times less risky than Almacenes Xito. It trades about 0.03 of its potential returns per unit of risk. Almacenes xito SA is currently generating about -0.03 per unit of risk. If you would invest 3,092 in Seadrill Limited on September 14, 2024 and sell it today you would earn a total of 707.00 from holding Seadrill Limited or generate 22.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.87% |
| Values | Daily Returns |
Seadrill Limited vs. Almacenes xito SA
Performance |
| Timeline |
| Seadrill Limited |
| Almacenes xito SA |
Seadrill and Almacenes Xito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seadrill and Almacenes Xito
The main advantage of trading using opposite Seadrill and Almacenes Xito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seadrill position performs unexpectedly, Almacenes Xito 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 Almacenes Xito will offset losses from the drop in Almacenes Xito's long position.| Seadrill vs. Nabors Industries | Seadrill vs. Borr Drilling | Seadrill vs. Patterson UTI Energy | Seadrill vs. Noble plc |
| Almacenes Xito vs. Delek Drilling | Almacenes Xito vs. Noble plc | Almacenes Xito vs. Sun Country Airlines | Almacenes Xito vs. Seadrill Limited |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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