Correlation Between Sonida Senior and Patterson UTI
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Patterson UTI 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 Sonida Senior and Patterson UTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonida Senior Living and Patterson UTI Energy, you can compare the effects of market volatilities on Sonida Senior and Patterson UTI 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 Sonida Senior with a short position of Patterson UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Patterson UTI.
Diversification Opportunities for Sonida Senior and Patterson UTI
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sonida and Patterson is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Patterson UTI Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patterson UTI Energy and Sonida Senior 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 Sonida Senior Living are associated (or correlated) with Patterson UTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patterson UTI Energy has no effect on the direction of Sonida Senior i.e., Sonida Senior and Patterson UTI go up and down completely randomly.
Pair Corralation between Sonida Senior and Patterson UTI
Given the investment horizon of 90 days Sonida Senior Living is expected to under-perform the Patterson UTI. But the stock apears to be less risky and, when comparing its historical volatility, Sonida Senior Living is 1.03 times less risky than Patterson UTI. The stock trades about -0.01 of its potential returns per unit of risk. The Patterson UTI Energy is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 785.00 in Patterson UTI Energy on August 31, 2024 and sell it today you would earn a total of 61.00 from holding Patterson UTI Energy or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Patterson UTI Energy
Performance |
| Timeline |
| Sonida Senior Living |
| Patterson UTI Energy |
Sonida Senior and Patterson UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Patterson UTI
The main advantage of trading using opposite Sonida Senior and Patterson UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Patterson UTI 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 Patterson UTI will offset losses from the drop in Patterson UTI's long position.| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. InnovAge Holding Corp |
| Patterson UTI vs. Nabors Industries | Patterson UTI vs. Precision Drilling | Patterson UTI vs. Noble plc | Patterson UTI vs. Helmerich and Payne |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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