Correlation Between Patterson UTI and Kenon Holdings
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Kenon 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 Kenon 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 Kenon Holdings, you can compare the effects of market volatilities on Patterson UTI and Kenon 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 Kenon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Kenon Holdings.
Diversification Opportunities for Patterson UTI and Kenon Holdings
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Patterson and Kenon is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Patterson UTI i.e., Patterson UTI and Kenon Holdings go up and down completely randomly.
Pair Corralation between Patterson UTI and Kenon Holdings
Given the investment horizon of 90 days Patterson UTI Energy is expected to under-perform the Kenon Holdings. In addition to that, Patterson UTI is 1.52 times more volatile than Kenon Holdings. It trades about -0.01 of its total potential returns per unit of risk. Kenon Holdings is currently generating about 0.18 per unit of volatility. If you would invest 2,461 in Kenon Holdings on August 28, 2024 and sell it today you would earn a total of 525.00 from holding Kenon Holdings or generate 21.33% 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. Kenon Holdings
Performance |
| Timeline |
| Patterson UTI Energy |
| Kenon Holdings |
Patterson UTI and Kenon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Kenon Holdings
The main advantage of trading using opposite Patterson UTI and Kenon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Kenon 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 Kenon Holdings will offset losses from the drop in Kenon Holdings' long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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