Correlation Between Patterson UTI and Doubledown Interactive

Can any of the company-specific risk be diversified away by investing in both Patterson UTI and Doubledown Interactive 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 Doubledown Interactive 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 Doubledown Interactive Co, you can compare the effects of market volatilities on Patterson UTI and Doubledown Interactive 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 Doubledown Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson UTI and Doubledown Interactive.

Diversification Opportunities for Patterson UTI and Doubledown Interactive

0.48

Correlation Coefficient

Patterson UTI  Doubledown Interactive

Very weak diversification

The 3 months correlation between Patterson and Doubledown is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Doubledown Interactive Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubledown Interactive 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 Doubledown Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubledown Interactive has no effect on the direction of Patterson UTI i.e., Patterson UTI and Doubledown Interactive go up and down completely randomly.

Pair Corralation between Patterson UTI and Doubledown Interactive

Given the investment horizon of 90 days Patterson UTI Energy is expected to generate 0.89 times more return on investment than Doubledown Interactive. However, Patterson UTI Energy is 1.12 times less risky than Doubledown Interactive. It trades about 0.02 of its potential returns per unit of risk. Doubledown Interactive Co is currently generating about -0.17 per unit of risk. If you would invest  821.00  in Patterson UTI Energy on October 3, 2024 and sell it today you would earn a total of  5.00  from holding Patterson UTI Energy or generate 0.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Patterson UTI Energy  vs.  Doubledown Interactive Co

Patterson UTI Energy

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Patterson UTI Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Patterson UTI is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Doubledown Interactive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubledown Interactive Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Patterson UTI and Doubledown Interactive

The main advantage of trading using opposite Patterson UTI and Doubledown Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson UTI position performs unexpectedly, Doubledown Interactive 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 Doubledown Interactive will offset losses from the drop in Doubledown Interactive's long position.

The idea behind Patterson UTI Energy and Doubledown Interactive Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.