Correlation Between Patterson UTI and Origen Resources
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Origen Resources 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 Origen Resources 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 Origen Resources, you can compare the effects of market volatilities on Patterson UTI and Origen Resources 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 Origen Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Origen Resources.
Diversification Opportunities for Patterson UTI and Origen Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Patterson and Origen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Origen Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origen Resources 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 Origen Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origen Resources has no effect on the direction of Patterson UTI i.e., Patterson UTI and Origen Resources go up and down completely randomly.
Pair Corralation between Patterson UTI and Origen Resources
Given the investment horizon of 90 days Patterson UTI Energy is expected to under-perform the Origen Resources. But the stock apears to be less risky and, when comparing its historical volatility, Patterson UTI Energy is 18.33 times less risky than Origen Resources. The stock trades about -0.01 of its potential returns per unit of risk. The Origen Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Origen Resources on September 2, 2024 and sell it today you would lose (17.90) from holding Origen Resources or give up 94.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Patterson UTI Energy vs. Origen Resources
Performance |
| Timeline |
| Patterson UTI Energy |
| Origen Resources |
Patterson UTI and Origen Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Origen Resources
The main advantage of trading using opposite Patterson UTI and Origen Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Origen Resources 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 Origen Resources will offset losses from the drop in Origen Resources' 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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