Correlation Between AKITA Drilling and Patterson UTI
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Patterson UTI 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 AKITA Drilling and Patterson UTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Patterson UTI Energy, you can compare the effects of market volatilities on AKITA Drilling and Patterson UTI 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 AKITA Drilling with a short position of Patterson UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Patterson UTI.
Diversification Opportunities for AKITA Drilling and Patterson UTI
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AKITA and Patterson is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Patterson UTI Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patterson UTI Energy and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Patterson UTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patterson UTI Energy has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Patterson UTI go up and down completely randomly.
Pair Corralation between AKITA Drilling and Patterson UTI
Assuming the 90 days horizon AKITA Drilling is expected to generate 1.1 times more return on investment than Patterson UTI. However, AKITA Drilling is 1.1 times more volatile than Patterson UTI Energy. It trades about 0.0 of its potential returns per unit of risk. Patterson UTI Energy is currently generating about -0.03 per unit of risk. If you would invest 149.00 in AKITA Drilling on August 25, 2024 and sell it today you would lose (28.00) from holding AKITA Drilling or give up 18.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKITA Drilling vs. Patterson UTI Energy
Performance |
| Timeline |
| AKITA Drilling |
| Patterson UTI Energy |
AKITA Drilling and Patterson UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Patterson UTI
The main advantage of trading using opposite AKITA Drilling and Patterson UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Patterson UTI 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 Patterson UTI will offset losses from the drop in Patterson UTI's long position.| AKITA Drilling vs. Petroleo Brasileiro Petrobras | AKITA Drilling vs. Equinor ASA ADR | AKITA Drilling vs. Eni SpA ADR | AKITA Drilling vs. YPF Sociedad Anonima |
| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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