Correlation Between Schlumberger and Bristow

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

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

Diversification Opportunities for Schlumberger and Bristow

0.19

Correlation Coefficient

Schlumberger  Bristow

Average diversification

The 3 months correlation between Schlumberger and Bristow is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Schlumberger NV and Bristow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristow Group and Schlumberger 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 Schlumberger NV are associated (or correlated) with Bristow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristow Group has no effect on the direction of Schlumberger i.e., Schlumberger and Bristow go up and down completely randomly.

Pair Corralation between Schlumberger and Bristow

Considering the 90-day investment horizon Schlumberger NV is expected to generate 0.8 times more return on investment than Bristow. However, Schlumberger NV is 1.24 times less risky than Bristow. It trades about 0.11 of its potential returns per unit of risk. Bristow Group is currently generating about -0.03 per unit of risk. If you would invest  3,755  in Schlumberger NV on December 30, 2024 and sell it today you would earn a total of  433.00  from holding Schlumberger NV or generate 11.53% return on investment over 90 days.

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

Schlumberger NV  vs.  Bristow Group

Schlumberger NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schlumberger NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Schlumberger may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bristow Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Schlumberger and Bristow

The main advantage of trading using opposite Schlumberger and Bristow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schlumberger position performs unexpectedly, Bristow 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 Bristow will offset losses from the drop in Bristow's long position.

The idea behind Schlumberger NV and Bristow Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.