Correlation Between Seadrill and Inhibrx
Can any of the company-specific risk be diversified away by investing in both Seadrill and Inhibrx 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 Inhibrx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seadrill Limited and Inhibrx, you can compare the effects of market volatilities on Seadrill and Inhibrx 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 Inhibrx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seadrill and Inhibrx.
Diversification Opportunities for Seadrill and Inhibrx
Significant diversification
The 3 months correlation between Seadrill and Inhibrx is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Seadrill Limited and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx 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 Inhibrx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhibrx has no effect on the direction of Seadrill i.e., Seadrill and Inhibrx go up and down completely randomly.
Pair Corralation between Seadrill and Inhibrx
Given the investment horizon of 90 days Seadrill Limited is expected to generate 0.5 times more return on investment than Inhibrx. However, Seadrill Limited is 2.0 times less risky than Inhibrx. It trades about 0.13 of its potential returns per unit of risk. Inhibrx is currently generating about -0.07 per unit of risk. If you would invest 3,595 in Seadrill Limited on October 25, 2024 and sell it today you would earn a total of 161.00 from holding Seadrill Limited or generate 4.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Seadrill Limited vs. Inhibrx
Performance |
Timeline |
Seadrill Limited |
Inhibrx |
Seadrill and Inhibrx Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Seadrill and Inhibrx
The main advantage of trading using opposite Seadrill and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seadrill position performs unexpectedly, Inhibrx 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 Inhibrx will offset losses from the drop in Inhibrx's long position.Seadrill vs. Nabors Industries | Seadrill vs. Borr Drilling | Seadrill vs. Patterson UTI Energy | Seadrill vs. Noble plc |
Inhibrx vs. Crinetics Pharmaceuticals | Inhibrx vs. Merus BV | Inhibrx vs. Lyell Immunopharma | Inhibrx vs. Kronos Bio |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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