Correlation Between Patterson UTI and SITE Centers
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and SITE Centers 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 SITE Centers 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 SITE Centers Corp, you can compare the effects of market volatilities on Patterson UTI and SITE Centers 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 SITE Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and SITE Centers.
Diversification Opportunities for Patterson UTI and SITE Centers
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Patterson and SITE is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and SITE Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITE Centers Corp 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 SITE Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITE Centers Corp has no effect on the direction of Patterson UTI i.e., Patterson UTI and SITE Centers go up and down completely randomly.
Pair Corralation between Patterson UTI and SITE Centers
Given the investment horizon of 90 days Patterson UTI Energy is expected to under-perform the SITE Centers. In addition to that, Patterson UTI is 2.51 times more volatile than SITE Centers Corp. It trades about -0.03 of its total potential returns per unit of risk. SITE Centers Corp is currently generating about 0.04 per unit of volatility. If you would invest 2,310 in SITE Centers Corp on September 5, 2024 and sell it today you would earn a total of 206.00 from holding SITE Centers Corp or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.98% |
| Values | Daily Returns |
Patterson UTI Energy vs. SITE Centers Corp
Performance |
| Timeline |
| Patterson UTI Energy |
| SITE Centers Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Patterson UTI and SITE Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and SITE Centers
The main advantage of trading using opposite Patterson UTI and SITE Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, SITE Centers 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 SITE Centers will offset losses from the drop in SITE Centers' long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
| SITE Centers vs. The Gabelli Multimedia | SITE Centers vs. The Gabelli Equity | SITE Centers vs. Virtus AllianzGI Convertible | SITE Centers vs. John Hancock Income |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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