Correlation Between EDPPL and Seadrill
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By analyzing existing cross correlation between EDPPL 171 24 JAN 28 and Seadrill Limited, you can compare the effects of market volatilities on EDPPL and Seadrill 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 EDPPL with a short position of Seadrill. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDPPL and Seadrill.
Diversification Opportunities for EDPPL and Seadrill
Very good diversification
The 3 months correlation between EDPPL and Seadrill is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding EDPPL 171 24 JAN 28 and Seadrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seadrill Limited and EDPPL 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 EDPPL 171 24 JAN 28 are associated (or correlated) with Seadrill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seadrill Limited has no effect on the direction of EDPPL i.e., EDPPL and Seadrill go up and down completely randomly.
Pair Corralation between EDPPL and Seadrill
Assuming the 90 days trading horizon EDPPL 171 24 JAN 28 is expected to under-perform the Seadrill. But the bond apears to be less risky and, when comparing its historical volatility, EDPPL 171 24 JAN 28 is 3.2 times less risky than Seadrill. The bond trades about -0.02 of its potential returns per unit of risk. The Seadrill Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,058 in Seadrill Limited on September 4, 2024 and sell it today you would lose (13.00) from holding Seadrill Limited or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.54% |
| Values | Daily Returns |
EDPPL 171 24 JAN 28 vs. Seadrill Limited
Performance |
| Timeline |
| EDPPL 171 24 |
| Seadrill Limited |
EDPPL and Seadrill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDPPL and Seadrill
The main advantage of trading using opposite EDPPL and Seadrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDPPL position performs unexpectedly, Seadrill 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 Seadrill will offset losses from the drop in Seadrill's long position.| EDPPL vs. Seadrill Limited | EDPPL vs. Fortress Transp Infra | EDPPL vs. SBM Offshore NV | EDPPL vs. Delek Drilling |
| Seadrill vs. Precision Drilling | Seadrill vs. Sable Offshore Corp | Seadrill vs. Patterson UTI Energy | Seadrill vs. Borr Drilling |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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