Correlation Between Patterson UTI and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and AKITA Drilling 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 and AKITA Drilling 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 AKITA Drilling, you can compare the effects of market volatilities on Patterson UTI and AKITA Drilling 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 with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and AKITA Drilling.
Diversification Opportunities for Patterson UTI and AKITA Drilling
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Patterson and AKITA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Patterson UTI 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 AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Patterson UTI i.e., Patterson UTI and AKITA Drilling go up and down completely randomly.
Pair Corralation between Patterson UTI and AKITA Drilling
Given the investment horizon of 90 days Patterson UTI Energy is expected to generate 1.96 times more return on investment than AKITA Drilling. However, Patterson UTI is 1.96 times more volatile than AKITA Drilling. It trades about 0.08 of its potential returns per unit of risk. AKITA Drilling is currently generating about 0.01 per unit of risk. If you would invest 798.00 in Patterson UTI Energy on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Patterson UTI Energy or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patterson UTI Energy vs. AKITA Drilling
Performance |
| Timeline |
| Patterson UTI Energy |
| AKITA Drilling |
Patterson UTI and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and AKITA Drilling
The main advantage of trading using opposite Patterson UTI and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
| AKITA Drilling vs. Petroleo Brasileiro Petrobras | AKITA Drilling vs. Equinor ASA ADR | AKITA Drilling vs. Eni SpA ADR | AKITA Drilling vs. YPF Sociedad Anonima |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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