Correlation Between Patterson Companies and AmerisourceBergen
Can any of the company-specific risk be diversified away by investing in both Patterson Companies and AmerisourceBergen 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 Patterson Companies and AmerisourceBergen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patterson Companies and AmerisourceBergen, you can compare the effects of market volatilities on Patterson Companies and AmerisourceBergen 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 Patterson Companies with a short position of AmerisourceBergen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson Companies and AmerisourceBergen.
Diversification Opportunities for Patterson Companies and AmerisourceBergen
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Patterson and AmerisourceBergen is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Patterson Companies and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen and Patterson Companies 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 Patterson Companies are associated (or correlated) with AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of Patterson Companies i.e., Patterson Companies and AmerisourceBergen go up and down completely randomly.
Pair Corralation between Patterson Companies and AmerisourceBergen
Assuming the 90 days horizon Patterson Companies is expected to generate 1.53 times less return on investment than AmerisourceBergen. In addition to that, Patterson Companies is 1.96 times more volatile than AmerisourceBergen. It trades about 0.11 of its total potential returns per unit of risk. AmerisourceBergen is currently generating about 0.33 per unit of volatility. If you would invest 21,285 in AmerisourceBergen on September 3, 2024 and sell it today you would earn a total of 2,120 from holding AmerisourceBergen or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patterson Companies vs. AmerisourceBergen
Performance |
| Timeline |
| Patterson Companies |
| AmerisourceBergen |
Patterson Companies and AmerisourceBergen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson Companies and AmerisourceBergen
The main advantage of trading using opposite Patterson Companies and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson Companies position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.| Patterson Companies vs. AmerisourceBergen | Patterson Companies vs. Superior Plus Corp | Patterson Companies vs. NMI Holdings | Patterson Companies vs. Origin Agritech |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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