Correlation Between Kite Realty and Patterson UTI
Can any of the company-specific risk be diversified away by investing in both Kite Realty 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 Kite Realty and Patterson UTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kite Realty Group and Patterson UTI Energy, you can compare the effects of market volatilities on Kite Realty 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 Kite Realty with a short position of Patterson UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Patterson UTI.
Diversification Opportunities for Kite Realty and Patterson UTI
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kite and Patterson is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group 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 Kite Realty 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 Kite Realty Group 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 Kite Realty i.e., Kite Realty and Patterson UTI go up and down completely randomly.
Pair Corralation between Kite Realty and Patterson UTI
Considering the 90-day investment horizon Kite Realty is expected to generate 1.4 times less return on investment than Patterson UTI. But when comparing it to its historical volatility, Kite Realty Group is 3.24 times less risky than Patterson UTI. It trades about 0.29 of its potential returns per unit of risk. Patterson UTI Energy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 798.00 in Patterson UTI Energy on August 28, 2024 and sell it today you would earn a total of 64.00 from holding Patterson UTI Energy or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kite Realty Group vs. Patterson UTI Energy
Performance |
| Timeline |
| Kite Realty Group |
| Patterson UTI Energy |
Kite Realty and Patterson UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Patterson UTI
The main advantage of trading using opposite Kite Realty and Patterson UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty 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.| Kite Realty vs. Site Centers Corp | Kite Realty vs. CBL Associates Properties | Kite Realty vs. Urban Edge Properties | Kite Realty vs. Acadia Realty Trust |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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