Correlation Between Patterson UTI and Sable Offshore
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Sable Offshore 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 Sable Offshore 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 Sable Offshore Corp, you can compare the effects of market volatilities on Patterson UTI and Sable Offshore 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 Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Sable Offshore.
Diversification Opportunities for Patterson UTI and Sable Offshore
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Patterson and Sable is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore 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 Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of Patterson UTI i.e., Patterson UTI and Sable Offshore go up and down completely randomly.
Pair Corralation between Patterson UTI and Sable Offshore
Given the investment horizon of 90 days Patterson UTI is expected to generate 1.38 times less return on investment than Sable Offshore. But when comparing it to its historical volatility, Patterson UTI Energy is 1.07 times less risky than Sable Offshore. It trades about 0.14 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,140 in Sable Offshore Corp on August 27, 2024 and sell it today you would earn a total of 268.00 from holding Sable Offshore Corp or generate 12.52% 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. Sable Offshore Corp
Performance |
| Timeline |
| Patterson UTI Energy |
| Sable Offshore Corp |
Patterson UTI and Sable Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Sable Offshore
The main advantage of trading using opposite Patterson UTI and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Sable Offshore 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 Sable Offshore will offset losses from the drop in Sable Offshore's long position.| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
| Sable Offshore vs. Helmerich and Payne | Sable Offshore vs. Noble plc | Sable Offshore vs. Nabors Industries | Sable Offshore vs. Precision Drilling |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |