Correlation Between Patterson UTI and Triad Business
Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Triad Business 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 Triad Business 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 Triad Business Bank, you can compare the effects of market volatilities on Patterson UTI and Triad Business 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 Triad Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Triad Business.
Diversification Opportunities for Patterson UTI and Triad Business
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Patterson and Triad is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Triad Business Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Business Bank 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 Triad Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Business Bank has no effect on the direction of Patterson UTI i.e., Patterson UTI and Triad Business go up and down completely randomly.
Pair Corralation between Patterson UTI and Triad Business
Given the investment horizon of 90 days Patterson UTI Energy is expected to under-perform the Triad Business. But the stock apears to be less risky and, when comparing its historical volatility, Patterson UTI Energy is 1.01 times less risky than Triad Business. The stock trades about -0.04 of its potential returns per unit of risk. The Triad Business Bank is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 658.00 in Triad Business Bank on September 14, 2024 and sell it today you would lose (151.00) from holding Triad Business Bank or give up 22.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Patterson UTI Energy vs. Triad Business Bank
Performance |
| Timeline |
| Patterson UTI Energy |
| Triad Business Bank |
Patterson UTI and Triad Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson UTI and Triad Business
The main advantage of trading using opposite Patterson UTI and Triad Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Triad Business 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 Triad Business will offset losses from the drop in Triad Business' long position.| Patterson UTI vs. Helmerich and Payne | Patterson UTI vs. Noble plc | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Sable Offshore Corp |
| Triad Business vs. SFL Corporation | Triad Business vs. Enersys | Triad Business vs. CECO Environmental Corp | Triad Business vs. Forsys Metals Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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