Correlation Between Valneva SE and Patterson UTI
Can any of the company-specific risk be diversified away by investing in both Valneva SE 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 Valneva SE and Patterson UTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valneva SE ADR and Patterson UTI Energy, you can compare the effects of market volatilities on Valneva SE 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 Valneva SE with a short position of Patterson UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Patterson UTI.
Diversification Opportunities for Valneva SE and Patterson UTI
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Valneva and Patterson is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR 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 Valneva SE 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 Valneva SE ADR 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 Valneva SE i.e., Valneva SE and Patterson UTI go up and down completely randomly.
Pair Corralation between Valneva SE and Patterson UTI
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Patterson UTI. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.14 times less risky than Patterson UTI. The stock trades about -0.63 of its potential returns per unit of risk. The Patterson UTI Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 798.00 in Patterson UTI Energy on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Patterson UTI Energy or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Patterson UTI Energy
Performance |
| Timeline |
| Valneva SE ADR |
| Patterson UTI Energy |
Valneva SE and Patterson UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Patterson UTI
The main advantage of trading using opposite Valneva SE and Patterson UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE 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.| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals | Valneva SE vs. Seres Therapeutics |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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