Correlation Between Patterson-UTI Energy and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Patterson-UTI Energy and ELMOS SEMICONDUCTOR 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-UTI Energy and ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patterson UTI Energy and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Patterson-UTI Energy and ELMOS SEMICONDUCTOR 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-UTI Energy with a short position of ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson-UTI Energy and ELMOS SEMICONDUCTOR.
Diversification Opportunities for Patterson-UTI Energy and ELMOS SEMICONDUCTOR
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Patterson-UTI and ELMOS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and Patterson-UTI Energy 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 UTI Energy are associated (or correlated) with ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of Patterson-UTI Energy i.e., Patterson-UTI Energy and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Patterson-UTI Energy and ELMOS SEMICONDUCTOR
Assuming the 90 days horizon Patterson UTI Energy is expected to under-perform the ELMOS SEMICONDUCTOR. In addition to that, Patterson-UTI Energy is 1.04 times more volatile than ELMOS SEMICONDUCTOR. It trades about -0.03 of its total potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about 0.02 per unit of volatility. If you would invest 5,692 in ELMOS SEMICONDUCTOR on September 3, 2024 and sell it today you would earn a total of 418.00 from holding ELMOS SEMICONDUCTOR or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patterson UTI Energy vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| Patterson UTI Energy |
| ELMOS SEMICONDUCTOR |
Patterson-UTI Energy and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson-UTI Energy and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite Patterson-UTI Energy and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson-UTI Energy position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.| Patterson-UTI Energy vs. TOREX SEMICONDUCTOR LTD | Patterson-UTI Energy vs. Elmos Semiconductor SE | Patterson-UTI Energy vs. Laureate Education | Patterson-UTI Energy vs. Magnachip Semiconductor |
| ELMOS SEMICONDUCTOR vs. NORWEGIAN AIR SHUT | ELMOS SEMICONDUCTOR vs. Westinghouse Air Brake | ELMOS SEMICONDUCTOR vs. Norwegian Air Shuttle | ELMOS SEMICONDUCTOR vs. Perseus Mining Limited |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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