Correlation Between Patterson UTI and Cementos Pacasmayo
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Cementos Pacasmayo 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 Cementos Pacasmayo 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 Cementos Pacasmayo SAA, you can compare the effects of market volatilities on Patterson UTI and Cementos Pacasmayo 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 Cementos Pacasmayo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Cementos Pacasmayo.
Diversification Opportunities for Patterson UTI and Cementos Pacasmayo
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Patterson and Cementos is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Cementos Pacasmayo SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Pacasmayo SAA 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 Cementos Pacasmayo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Pacasmayo SAA has no effect on the direction of Patterson UTI i.e., Patterson UTI and Cementos Pacasmayo go up and down completely randomly.
Pair Corralation between Patterson UTI and Cementos Pacasmayo
Given the investment horizon of 90 days Patterson UTI Energy is expected to generate 1.24 times more return on investment than Cementos Pacasmayo. However, Patterson UTI is 1.24 times more volatile than Cementos Pacasmayo SAA. It trades about 0.1 of its potential returns per unit of risk. Cementos Pacasmayo SAA is currently generating about 0.01 per unit of risk. If you would invest 765.00 in Patterson UTI Energy on August 30, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patterson UTI Energy vs. Cementos Pacasmayo SAA
Performance |
| Timeline |
| Patterson UTI Energy |
| Cementos Pacasmayo SAA |
Patterson UTI and Cementos Pacasmayo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Cementos Pacasmayo
The main advantage of trading using opposite Patterson UTI and Cementos Pacasmayo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Cementos Pacasmayo 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 Cementos Pacasmayo will offset losses from the drop in Cementos Pacasmayo's long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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