Correlation Between Seadrill and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Seadrill and ProShares Ultra 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 ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seadrill Limited and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Seadrill and ProShares Ultra 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 ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seadrill and ProShares Ultra.
Diversification Opportunities for Seadrill and ProShares Ultra
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seadrill and ProShares is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Seadrill Limited and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg 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 ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Bloomberg has no effect on the direction of Seadrill i.e., Seadrill and ProShares Ultra go up and down completely randomly.
Pair Corralation between Seadrill and ProShares Ultra
Given the investment horizon of 90 days Seadrill Limited is expected to generate 0.37 times more return on investment than ProShares Ultra. However, Seadrill Limited is 2.67 times less risky than ProShares Ultra. It trades about 0.05 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about -0.09 per unit of risk. If you would invest 3,320 in Seadrill Limited on January 17, 2024 and sell it today you would earn a total of 1,812 from holding Seadrill Limited or generate 54.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.17% |
| Values | Daily Returns |
Seadrill Limited vs. ProShares Ultra Bloomberg
Performance |
| Timeline |
| Seadrill Limited |
| ProShares Ultra Bloomberg |
Seadrill and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seadrill and ProShares Ultra
The main advantage of trading using opposite Seadrill and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seadrill position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra's long position.| Seadrill vs. Diamond Offshore Drilling | Seadrill vs. Nabors Industries | Seadrill vs. Borr Drilling | Seadrill vs. Patterson UTI Energy |
| ProShares Ultra vs. Drum Income Plus | ProShares Ultra vs. EA Series Trust | ProShares Ultra vs. Global X MLP | ProShares Ultra vs. ETRACS Quarterly Pay |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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