Correlation Between Patterson UTI and Bel Fuse
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Bel Fuse 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 Bel Fuse 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 Bel Fuse A, you can compare the effects of market volatilities on Patterson UTI and Bel Fuse 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 Bel Fuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Bel Fuse.
Diversification Opportunities for Patterson UTI and Bel Fuse
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Patterson and Bel is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Bel Fuse A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bel Fuse A 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 Bel Fuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bel Fuse A has no effect on the direction of Patterson UTI i.e., Patterson UTI and Bel Fuse go up and down completely randomly.
Pair Corralation between Patterson UTI and Bel Fuse
Given the investment horizon of 90 days Patterson UTI Energy is expected to generate 1.57 times more return on investment than Bel Fuse. However, Patterson UTI is 1.57 times more volatile than Bel Fuse A. It trades about 0.13 of its potential returns per unit of risk. Bel Fuse A is currently generating about -0.13 per unit of risk. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patterson UTI Energy vs. Bel Fuse A
Performance |
| Timeline |
| Patterson UTI Energy |
| Bel Fuse A |
Patterson UTI and Bel Fuse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Bel Fuse
The main advantage of trading using opposite Patterson UTI and Bel Fuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Bel Fuse 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 Bel Fuse will offset losses from the drop in Bel Fuse's long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
| Bel Fuse vs. Richardson Electronics | Bel Fuse vs. LSI Industries | Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Plexus Corp |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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