Correlation Between Seadrill and Sinopec Oilfield
Can any of the company-specific risk be diversified away by investing in both Seadrill and Sinopec Oilfield 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 Sinopec Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seadrill Limited and Sinopec Oilfield Service, you can compare the effects of market volatilities on Seadrill and Sinopec Oilfield 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 Sinopec Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seadrill and Sinopec Oilfield.
Diversification Opportunities for Seadrill and Sinopec Oilfield
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seadrill and Sinopec is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Seadrill Limited and Sinopec Oilfield Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Oilfield Service 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 Sinopec Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Oilfield Service has no effect on the direction of Seadrill i.e., Seadrill and Sinopec Oilfield go up and down completely randomly.
Pair Corralation between Seadrill and Sinopec Oilfield
If you would invest 3,567 in Seadrill Limited on October 23, 2024 and sell it today you would earn a total of 223.00 from holding Seadrill Limited or generate 6.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 94.74% |
Values | Daily Returns |
Seadrill Limited vs. Sinopec Oilfield Service
Performance |
Timeline |
Seadrill Limited |
Sinopec Oilfield Service |
Seadrill and Sinopec Oilfield Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Seadrill and Sinopec Oilfield
The main advantage of trading using opposite Seadrill and Sinopec Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seadrill position performs unexpectedly, Sinopec Oilfield 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 Sinopec Oilfield will offset losses from the drop in Sinopec Oilfield's long position.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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