Correlation Between Patterson UTI and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Celsius Holdings 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 Celsius Holdings 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 Celsius Holdings, you can compare the effects of market volatilities on Patterson UTI and Celsius Holdings 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 Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Celsius Holdings.
Diversification Opportunities for Patterson UTI and Celsius Holdings
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Patterson and Celsius is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings 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 Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of Patterson UTI i.e., Patterson UTI and Celsius Holdings go up and down completely randomly.
Pair Corralation between Patterson UTI and Celsius Holdings
Given the investment horizon of 90 days Patterson UTI Energy is expected to generate 0.68 times more return on investment than Celsius Holdings. However, Patterson UTI Energy is 1.46 times less risky than Celsius Holdings. It trades about 0.1 of its potential returns per unit of risk. Celsius Holdings is currently generating about -0.04 per unit of risk. If you would invest 765.00 in Patterson UTI Energy on August 31, 2024 and sell it today you would earn a total of 81.00 from holding Patterson UTI Energy or generate 10.59% 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. Celsius Holdings
Performance |
| Timeline |
| Patterson UTI Energy |
| Celsius Holdings |
Patterson UTI and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Celsius Holdings
The main advantage of trading using opposite Patterson UTI and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Celsius Holdings 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 Celsius Holdings will offset losses from the drop in Celsius Holdings' long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. PepsiCo | Celsius Holdings vs. The Coca Cola | Celsius Holdings vs. Coca Cola Femsa SAB |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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