Correlation Between Burnham Holdings and Seadrill

Can any of the company-specific risk be diversified away by investing in both Burnham Holdings and Seadrill 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 Burnham Holdings and Seadrill into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Burnham Holdings PFD and Seadrill Limited, you can compare the effects of market volatilities on Burnham Holdings 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 Burnham Holdings with a short position of Seadrill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burnham Holdings and Seadrill.

Diversification Opportunities for Burnham Holdings and Seadrill

0.0

Correlation Coefficient

Burnham Holdings  Seadrill

Pay attention - limited upside

The 3 months correlation between Burnham and Seadrill is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Burnham Holdings PFD and Seadrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seadrill Limited and Burnham Holdings 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 Burnham Holdings PFD 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 Burnham Holdings i.e., Burnham Holdings and Seadrill go up and down completely randomly.

Pair Corralation between Burnham Holdings and Seadrill

If you would invest  5,325  in Burnham Holdings PFD on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Burnham Holdings PFD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Burnham Holdings PFD  vs.  Seadrill Limited

Burnham Holdings PFD

Risk-Adjusted Performance

Very Weak

Over the last 90 days Burnham Holdings PFD has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Burnham Holdings is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Seadrill Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seadrill Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Burnham Holdings and Seadrill

The main advantage of trading using opposite Burnham Holdings and Seadrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burnham Holdings 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 Burnham Holdings PFD 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.