Correlation Between Patterson UTI and Pampa Energa
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Pampa Energa 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 Pampa Energa 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 Pampa Energa SA, you can compare the effects of market volatilities on Patterson UTI and Pampa Energa 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 Pampa Energa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Pampa Energa.
Diversification Opportunities for Patterson UTI and Pampa Energa
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Patterson and Pampa is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Pampa Energa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energa SA 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 Pampa Energa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energa SA has no effect on the direction of Patterson UTI i.e., Patterson UTI and Pampa Energa go up and down completely randomly.
Pair Corralation between Patterson UTI and Pampa Energa
Given the investment horizon of 90 days Patterson UTI Energy is expected to under-perform the Pampa Energa. But the stock apears to be less risky and, when comparing its historical volatility, Patterson UTI Energy is 1.41 times less risky than Pampa Energa. The stock trades about -0.02 of its potential returns per unit of risk. The Pampa Energa SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 105.00 in Pampa Energa SA on September 12, 2024 and sell it today you would earn a total of 127.00 from holding Pampa Energa SA or generate 120.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Patterson UTI Energy vs. Pampa Energa SA
Performance |
| Timeline |
| Patterson UTI Energy |
| Pampa Energa SA |
Patterson UTI and Pampa Energa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Pampa Energa
The main advantage of trading using opposite Patterson UTI and Pampa Energa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Pampa Energa 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 Pampa Energa will offset losses from the drop in Pampa Energa's long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Borr Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Transocean |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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