Correlation Between Golden Matrix and Seadrill

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

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

Diversification Opportunities for Golden Matrix and Seadrill

0.43

Correlation Coefficient

Golden Matrix  Seadrill

Very weak diversification

The 3 months correlation between Golden and Seadrill is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group and Seadrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seadrill Limited and Golden Matrix 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 Golden Matrix Group 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 Golden Matrix i.e., Golden Matrix and Seadrill go up and down completely randomly.

Pair Corralation between Golden Matrix and Seadrill

Given the investment horizon of 90 days Golden Matrix Group is expected to under-perform the Seadrill. In addition to that, Golden Matrix is 1.94 times more volatile than Seadrill Limited. It trades about -0.01 of its total potential returns per unit of risk. Seadrill Limited is currently generating about -0.01 per unit of volatility. If you would invest  3,978  in Seadrill Limited on September 16, 2024 and sell it today you would lose (153.00) from holding Seadrill Limited or give up 3.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Golden Matrix Group  vs.  Seadrill Limited

Golden Matrix Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Matrix Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Golden Matrix is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Seadrill Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seadrill Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Seadrill is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Golden Matrix and Seadrill

The main advantage of trading using opposite Golden Matrix and Seadrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Matrix 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 Golden Matrix Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.