Correlation Between Seadrill and Sable Offshore
Can any of the company-specific risk be diversified away by investing in both Seadrill and Sable Offshore 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 Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seadrill Limited and Sable Offshore Corp, you can compare the effects of market volatilities on Seadrill and Sable Offshore 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 Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seadrill and Sable Offshore.
Diversification Opportunities for Seadrill and Sable Offshore
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seadrill and Sable is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Seadrill Limited and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore Corp 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 Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of Seadrill i.e., Seadrill and Sable Offshore go up and down completely randomly.
Pair Corralation between Seadrill and Sable Offshore
Given the investment horizon of 90 days Seadrill is expected to generate 4.83 times less return on investment than Sable Offshore. But when comparing it to its historical volatility, Seadrill Limited is 2.06 times less risky than Sable Offshore. It trades about 0.13 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,284 in Sable Offshore Corp on October 25, 2024 and sell it today you would earn a total of 541.00 from holding Sable Offshore Corp or generate 23.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seadrill Limited vs. Sable Offshore Corp
Performance |
| Timeline |
| Seadrill Limited |
| Sable Offshore Corp |
Seadrill and Sable Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seadrill and Sable Offshore
The main advantage of trading using opposite Seadrill and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seadrill position performs unexpectedly, Sable Offshore 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 Sable Offshore will offset losses from the drop in Sable Offshore's long position.| Seadrill vs. Nabors Industries | Seadrill vs. Borr Drilling | Seadrill vs. Patterson UTI Energy | Seadrill vs. Noble plc |
| Sable Offshore vs. United Homes Group | Sable Offshore vs. Lowes Companies | Sable Offshore vs. GATX Corporation | Sable Offshore vs. Vornado Realty Trust |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |