Correlation Between Helmerich Payne and Patterson UTI
Can any of the company-specific risk be diversified away by investing in both Helmerich Payne 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 Helmerich Payne and Patterson UTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helmerich Payne and Patterson UTI Energy, you can compare the effects of market volatilities on Helmerich Payne 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 Helmerich Payne with a short position of Patterson UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helmerich Payne and Patterson UTI.
Diversification Opportunities for Helmerich Payne and Patterson UTI
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Helmerich and Patterson is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Helmerich Payne 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 Helmerich Payne 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 Helmerich Payne 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 Helmerich Payne i.e., Helmerich Payne and Patterson UTI go up and down completely randomly.
Pair Corralation between Helmerich Payne and Patterson UTI
Assuming the 90 days horizon Helmerich Payne is expected to generate 0.85 times more return on investment than Patterson UTI. However, Helmerich Payne is 1.18 times less risky than Patterson UTI. 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 3,992 in Helmerich Payne on September 12, 2024 and sell it today you would lose (780.00) from holding Helmerich Payne or give up 19.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helmerich Payne vs. Patterson UTI Energy
Performance |
| Timeline |
| Helmerich Payne |
| Patterson UTI Energy |
Helmerich Payne and Patterson UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helmerich Payne and Patterson UTI
The main advantage of trading using opposite Helmerich Payne and Patterson UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helmerich Payne 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.| Helmerich Payne vs. Nabors Industries | Helmerich Payne vs. PRECISION DRILLING P | Helmerich Payne vs. SHELF DRILLING LTD | Helmerich Payne vs. Daldrup Shne Aktiengesellschaft |
| Patterson UTI vs. Columbia Sportswear | Patterson UTI vs. Ming Le Sports | Patterson UTI vs. NTG Nordic Transport | Patterson UTI vs. USWE SPORTS AB |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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