Correlation Between Patterson UTI and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Kite Realty 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 Kite Realty 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 Kite Realty Group, you can compare the effects of market volatilities on Patterson UTI and Kite Realty 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 Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Kite Realty.
Diversification Opportunities for Patterson UTI and Kite Realty
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Patterson and Kite is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Kite Realty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kite Realty Group 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 Kite Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kite Realty Group has no effect on the direction of Patterson UTI i.e., Patterson UTI and Kite Realty go up and down completely randomly.
Pair Corralation between Patterson UTI and Kite Realty
Given the investment horizon of 90 days Patterson UTI Energy is expected to generate 3.04 times more return on investment than Kite Realty. However, Patterson UTI is 3.04 times more volatile than Kite Realty Group. It trades about 0.11 of its potential returns per unit of risk. Kite Realty Group is currently generating about 0.17 per unit of risk. If you would invest 780.00 in Patterson UTI Energy on August 24, 2024 and sell it today you would earn a total of 56.00 from holding Patterson UTI Energy or generate 7.18% 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. Kite Realty Group
Performance |
| Timeline |
| Patterson UTI Energy |
| Kite Realty Group |
Patterson UTI and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Kite Realty
The main advantage of trading using opposite Patterson UTI and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Kite Realty 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 Kite Realty will offset losses from the drop in Kite Realty's long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
| Kite Realty vs. Site Centers Corp | Kite Realty vs. CBL Associates Properties | Kite Realty vs. Urban Edge Properties | Kite Realty vs. Acadia Realty Trust |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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