Correlation Between Seadrill and Archer

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

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

Diversification Opportunities for Seadrill and Archer

0.06

Correlation Coefficient

Seadrill  Archer

Significant diversification

The 3 months correlation between Seadrill and Archer is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Seadrill Limited and Archer Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Limited 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 Archer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Limited has no effect on the direction of Seadrill i.e., Seadrill and Archer go up and down completely randomly.

Pair Corralation between Seadrill and Archer

Given the investment horizon of 90 days Seadrill Limited is expected to generate 0.99 times more return on investment than Archer. However, Seadrill Limited is 1.01 times less risky than Archer. It trades about 0.02 of its potential returns per unit of risk. Archer Limited is currently generating about -0.12 per unit of risk. If you would invest  3,278  in Seadrill Limited on September 12, 2025 and sell it today you would earn a total of  47.00  from holding Seadrill Limited or generate 1.43% return on investment over 90 days.

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

Seadrill Limited  vs.  Archer Limited

Seadrill Limited

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in Seadrill Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Seadrill is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Archer Limited

Risk-Adjusted Performance

Weakest

Over the last 90 days Archer Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Seadrill and Archer

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

The idea behind Seadrill Limited and Archer 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.