Correlation Between Dawson Geophysical and Patterson UTI
Can any of the company-specific risk be diversified away by investing in both Dawson Geophysical 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 Dawson Geophysical and Patterson UTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dawson Geophysical and Patterson UTI Energy, you can compare the effects of market volatilities on Dawson Geophysical 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 Dawson Geophysical with a short position of Patterson UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dawson Geophysical and Patterson UTI.
Diversification Opportunities for Dawson Geophysical and Patterson UTI
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dawson and Patterson is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dawson Geophysical 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 Dawson Geophysical 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 Dawson Geophysical 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 Dawson Geophysical i.e., Dawson Geophysical and Patterson UTI go up and down completely randomly.
Pair Corralation between Dawson Geophysical and Patterson UTI
Given the investment horizon of 90 days Dawson Geophysical is expected to generate 2.06 times more return on investment than Patterson UTI. However, Dawson Geophysical is 2.06 times more volatile than Patterson UTI Energy. It trades about 0.02 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 190.00 in Dawson Geophysical on August 31, 2024 and sell it today you would lose (40.00) from holding Dawson Geophysical or give up 21.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Dawson Geophysical vs. Patterson UTI Energy
Performance |
| Timeline |
| Dawson Geophysical |
| Patterson UTI Energy |
Dawson Geophysical and Patterson UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dawson Geophysical and Patterson UTI
The main advantage of trading using opposite Dawson Geophysical and Patterson UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dawson Geophysical 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.| Dawson Geophysical vs. NXT Energy Solutions | Dawson Geophysical vs. Mccoy Global | Dawson Geophysical vs. National Energy Services | Dawson Geophysical vs. Ranger Energy Services |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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