Correlation Between Seadrill and Gamehost

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

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

Diversification Opportunities for Seadrill and Gamehost

0.83

Correlation Coefficient

Seadrill  Gamehost

Very poor diversification

The 3 months correlation between Seadrill and Gamehost is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Seadrill Limited and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost 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 Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Seadrill i.e., Seadrill and Gamehost go up and down completely randomly.

Pair Corralation between Seadrill and Gamehost

Given the investment horizon of 90 days Seadrill Limited is expected to generate 1.57 times more return on investment than Gamehost. However, Seadrill is 1.57 times more volatile than Gamehost. It trades about 0.24 of its potential returns per unit of risk. Gamehost is currently generating about 0.28 per unit of risk. If you would invest  2,062  in Seadrill Limited on April 25, 2025 and sell it today you would earn a total of  1,001  from holding Seadrill Limited or generate 48.55% return on investment over 90 days.

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

Seadrill Limited  vs.  Gamehost

Seadrill Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Seadrill Limited are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Seadrill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Gamehost

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gamehost are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Gamehost reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seadrill and Gamehost

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

The idea behind Seadrill Limited and Gamehost 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.