Correlation Between FEDEX and Seadrill
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By analyzing existing cross correlation between FEDEX P 405 and Seadrill Limited, you can compare the effects of market volatilities on FEDEX 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 FEDEX with a short position of Seadrill. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEDEX and Seadrill.
Diversification Opportunities for FEDEX and Seadrill
Significant diversification
The 3 months correlation between FEDEX and Seadrill is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding FEDEX P 405 and Seadrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seadrill Limited and FEDEX 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 FEDEX P 405 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 FEDEX i.e., FEDEX and Seadrill go up and down completely randomly.
Pair Corralation between FEDEX and Seadrill
Assuming the 90 days trading horizon FEDEX P 405 is expected to generate 0.43 times more return on investment than Seadrill. However, FEDEX P 405 is 2.34 times less risky than Seadrill. It trades about 0.33 of its potential returns per unit of risk. Seadrill Limited is currently generating about 0.0 per unit of risk. If you would invest 7,882 in FEDEX P 405 on September 13, 2024 and sell it today you would earn a total of 522.00 from holding FEDEX P 405 or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
FEDEX P 405 vs. Seadrill Limited
Performance |
| Timeline |
| FEDEX P 405 |
| Seadrill Limited |
FEDEX and Seadrill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEDEX and Seadrill
The main advantage of trading using opposite FEDEX and Seadrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEDEX 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.The idea behind FEDEX P 405 and Seadrill Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Seadrill vs. Nabors Industries | Seadrill vs. Borr Drilling | Seadrill vs. Patterson UTI Energy | Seadrill vs. Noble plc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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