Correlation Between Seadrill and J Long
Can any of the company-specific risk be diversified away by investing in both Seadrill and J Long 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 J Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seadrill Limited and J Long Group Limited, you can compare the effects of market volatilities on Seadrill and J Long 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 J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seadrill and J Long.
Diversification Opportunities for Seadrill and J Long
Very good diversification
The 3 months correlation between Seadrill and J Long is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Seadrill Limited and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group 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 J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of Seadrill i.e., Seadrill and J Long go up and down completely randomly.
Pair Corralation between Seadrill and J Long
Given the investment horizon of 90 days Seadrill Limited is expected to generate 0.22 times more return on investment than J Long. However, Seadrill Limited is 4.65 times less risky than J Long. It trades about -0.02 of its potential returns per unit of risk. J Long Group Limited is currently generating about -0.02 per unit of risk. If you would invest 3,435 in Seadrill Limited on December 6, 2024 and sell it today you would lose (990.00) from holding Seadrill Limited or give up 28.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.68% |
| Values | Daily Returns |
Seadrill Limited vs. J Long Group Limited
Performance |
| Timeline |
| Seadrill Limited |
| J Long Group |
Seadrill and J Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seadrill and J Long
The main advantage of trading using opposite Seadrill and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seadrill position performs unexpectedly, J Long 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 J Long will offset losses from the drop in J Long's long position.| Seadrill vs. Nabors Industries | Seadrill vs. Borr Drilling | Seadrill vs. Patterson UTI Energy | Seadrill vs. Noble plc |
| J Long vs. Monster Beverage Corp | J Long vs. Cansortium | J Long vs. Paysafe | J Long vs. Anheuser Busch Inbev |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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