Correlation Between Chemours and Patterson UTI
Can any of the company-specific risk be diversified away by investing in both Chemours 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 Chemours and Patterson UTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Patterson UTI Energy, you can compare the effects of market volatilities on Chemours 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 Chemours with a short position of Patterson UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Patterson UTI.
Diversification Opportunities for Chemours and Patterson UTI
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chemours and Patterson is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co 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 Chemours 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 Chemours Co 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 Chemours i.e., Chemours and Patterson UTI go up and down completely randomly.
Pair Corralation between Chemours and Patterson UTI
Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the Patterson UTI. In addition to that, Chemours is 1.18 times more volatile than Patterson UTI Energy. It trades about -0.03 of its total potential returns per unit of risk. Patterson UTI Energy is currently generating about -0.02 per unit of volatility. If you would invest 904.00 in Patterson UTI Energy on November 28, 2024 and sell it today you would lose (93.00) from holding Patterson UTI Energy or give up 10.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Patterson UTI Energy
Performance |
| Timeline |
| Chemours |
| Patterson UTI Energy |
Chemours and Patterson UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Patterson UTI
The main advantage of trading using opposite Chemours and Patterson UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours 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.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |