Correlation Between Patterson UTI and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Planet Fitness 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 Planet Fitness 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 Planet Fitness, you can compare the effects of market volatilities on Patterson UTI and Planet Fitness 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 Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Planet Fitness.
Diversification Opportunities for Patterson UTI and Planet Fitness
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Patterson and Planet is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness 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 Planet Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Fitness has no effect on the direction of Patterson UTI i.e., Patterson UTI and Planet Fitness go up and down completely randomly.
Pair Corralation between Patterson UTI and Planet Fitness
Given the investment horizon of 90 days Patterson UTI Energy is expected to under-perform the Planet Fitness. In addition to that, Patterson UTI is 1.21 times more volatile than Planet Fitness. It trades about -0.01 of its total potential returns per unit of risk. Planet Fitness is currently generating about 0.06 per unit of volatility. If you would invest 6,942 in Planet Fitness on September 4, 2024 and sell it today you would earn a total of 3,016 from holding Planet Fitness or generate 43.45% 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. Planet Fitness
Performance |
| Timeline |
| Patterson UTI Energy |
| Planet Fitness |
Patterson UTI and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Planet Fitness
The main advantage of trading using opposite Patterson UTI and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Planet Fitness 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 Planet Fitness will offset losses from the drop in Planet Fitness' long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
| Planet Fitness vs. Hyatt Hotels | Planet Fitness vs. Smart Share Global | Planet Fitness vs. Sweetgreen | Planet Fitness vs. Wyndham Hotels Resorts |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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