Correlation Between Take Two and Patterson UTI
Can any of the company-specific risk be diversified away by investing in both Take Two 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 Take Two and Patterson UTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Take Two Interactive Software and Patterson UTI Energy, you can compare the effects of market volatilities on Take Two 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 Take Two with a short position of Patterson UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Patterson UTI.
Diversification Opportunities for Take Two and Patterson UTI
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Take and Patterson is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software 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 Take Two 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 Take Two Interactive Software 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 Take Two i.e., Take Two and Patterson UTI go up and down completely randomly.
Pair Corralation between Take Two and Patterson UTI
Given the investment horizon of 90 days Take Two Interactive Software is expected to under-perform the Patterson UTI. But the stock apears to be less risky and, when comparing its historical volatility, Take Two Interactive Software is 1.61 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 0.0 of returns per unit of risk over similar time horizon. If you would invest 842.00 in Patterson UTI Energy on November 9, 2024 and sell it today you would lose (4.00) from holding Patterson UTI Energy or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Patterson UTI Energy
Performance |
| Timeline |
| Take Two Interactive |
| Patterson UTI Energy |
Take Two and Patterson UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Patterson UTI
The main advantage of trading using opposite Take Two and Patterson UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two 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.| Take Two vs. Nintendo Co ADR | Take Two vs. NetEase | Take Two vs. Playtika Holding Corp | Take Two vs. Electronic Arts |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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