Correlation Between Patterson UTI and ZenaTech

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

Diversification Opportunities for Patterson UTI and ZenaTech

0.11

Correlation Coefficient

Patterson UTI  ZenaTech

Average diversification

The 3 months correlation between Patterson and ZenaTech is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and ZenaTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZenaTech 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 ZenaTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZenaTech has no effect on the direction of Patterson UTI i.e., Patterson UTI and ZenaTech go up and down completely randomly.

Pair Corralation between Patterson UTI and ZenaTech

Given the investment horizon of 90 days Patterson UTI is expected to generate 19.18 times less return on investment than ZenaTech. But when comparing it to its historical volatility, Patterson UTI Energy is 12.92 times less risky than ZenaTech. It trades about 0.09 of its potential returns per unit of risk. ZenaTech is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  221.00  in ZenaTech on October 25, 2024 and sell it today you would earn a total of  387.00  from holding ZenaTech or generate 175.11% return on investment over 90 days.

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

Patterson UTI Energy  vs.  ZenaTech

Patterson UTI Energy

Risk-Adjusted Performance

6 of 100

OK

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.

ZenaTech

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZenaTech are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, ZenaTech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Patterson UTI and ZenaTech

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

The idea behind Patterson UTI Energy and ZenaTech 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.