Correlation Between Globalfoundries and Seadrill
Can any of the company-specific risk be diversified away by investing in both Globalfoundries 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 Globalfoundries and Seadrill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and Seadrill Limited, you can compare the effects of market volatilities on Globalfoundries 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 Globalfoundries with a short position of Seadrill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and Seadrill.
Diversification Opportunities for Globalfoundries and Seadrill
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Globalfoundries and Seadrill is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and Seadrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seadrill Limited and Globalfoundries 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 Globalfoundries 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 Globalfoundries i.e., Globalfoundries and Seadrill go up and down completely randomly.
Pair Corralation between Globalfoundries and Seadrill
Considering the 90-day investment horizon Globalfoundries is expected to generate 1.02 times more return on investment than Seadrill. However, Globalfoundries is 1.02 times more volatile than Seadrill Limited. It trades about 0.07 of its potential returns per unit of risk. Seadrill Limited is currently generating about -0.17 per unit of risk. If you would invest 4,275 in Globalfoundries on September 15, 2024 and sell it today you would earn a total of 113.00 from holding Globalfoundries or generate 2.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Globalfoundries vs. Seadrill Limited
Performance |
Timeline |
Globalfoundries |
Seadrill Limited |
Globalfoundries and Seadrill Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Globalfoundries and Seadrill
The main advantage of trading using opposite Globalfoundries and Seadrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries 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.Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
Seadrill vs. Helmerich and Payne | Seadrill vs. Precision Drilling | Seadrill vs. Sable Offshore Corp | Seadrill vs. Borr Drilling |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Bonds Directory Find actively traded corporate debentures issued by US companies |