Correlation Between Anterix and Seadrill

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

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

Diversification Opportunities for Anterix and Seadrill

0.57

Correlation Coefficient

Anterix  Seadrill

Very weak diversification

The 3 months correlation between Anterix and Seadrill is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Anterix and Seadrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seadrill Limited and Anterix 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 Anterix 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 Anterix i.e., Anterix and Seadrill go up and down completely randomly.

Pair Corralation between Anterix and Seadrill

Given the investment horizon of 90 days Anterix is expected to under-perform the Seadrill. But the stock apears to be less risky and, when comparing its historical volatility, Anterix is 1.04 times less risky than Seadrill. The stock trades about -0.16 of its potential returns per unit of risk. The Seadrill Limited is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  4,176  in Seadrill Limited on September 20, 2024 and sell it today you would lose (516.00) from holding Seadrill Limited or give up 12.36% of portfolio value over 90 days.

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

Anterix  vs.  Seadrill Limited

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Anterix and Seadrill

The main advantage of trading using opposite Anterix and Seadrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anterix 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 Anterix 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.