Correlation Between Patterson UTI and Menora Mivtachim

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

Diversification Opportunities for Patterson UTI and Menora Mivtachim

0.0

Correlation Coefficient

Patterson UTI  Menora Mivtachim

Pay attention - limited upside

The 3 months correlation between Patterson and Menora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Menora Mivtachim Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menora Mivtachim Holdings 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 Menora Mivtachim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menora Mivtachim Holdings has no effect on the direction of Patterson UTI i.e., Patterson UTI and Menora Mivtachim go up and down completely randomly.

Pair Corralation between Patterson UTI and Menora Mivtachim

If you would invest  745.00  in Patterson UTI Energy on December 21, 2024 and sell it today you would earn a total of  96.00  from holding Patterson UTI Energy or generate 12.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Patterson UTI Energy  vs.  Menora Mivtachim Holdings

Patterson UTI Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Patterson UTI Energy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Patterson UTI displayed solid returns over the last few months and may actually be approaching a breakup point.

Menora Mivtachim Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Menora Mivtachim Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Menora Mivtachim is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Patterson UTI and Menora Mivtachim

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

The idea behind Patterson UTI Energy and Menora Mivtachim Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.