Correlation Between Patrick Industries and PDF Solutions

Can any of the company-specific risk be diversified away by investing in both Patrick Industries and PDF Solutions 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 Patrick Industries and PDF Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Patrick Industries and PDF Solutions, you can compare the effects of market volatilities on Patrick Industries and PDF Solutions 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 Patrick Industries with a short position of PDF Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patrick Industries and PDF Solutions.

Diversification Opportunities for Patrick Industries and PDF Solutions

0.24

Correlation Coefficient

Patrick Industries  PDF Solutions

Modest diversification

The 3 months correlation between Patrick and PDF is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Patrick Industries and PDF Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDF Solutions and Patrick Industries 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 Patrick Industries are associated (or correlated) with PDF Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDF Solutions has no effect on the direction of Patrick Industries i.e., Patrick Industries and PDF Solutions go up and down completely randomly.

Pair Corralation between Patrick Industries and PDF Solutions

Given the investment horizon of 90 days Patrick Industries is expected to generate 0.71 times more return on investment than PDF Solutions. However, Patrick Industries is 1.42 times less risky than PDF Solutions. It trades about 0.23 of its potential returns per unit of risk. PDF Solutions is currently generating about 0.05 per unit of risk. If you would invest  8,778  in Patrick Industries on May 24, 2025 and sell it today you would earn a total of  2,835  from holding Patrick Industries or generate 32.3% return on investment over 90 days.

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

Patrick Industries  vs.  PDF Solutions

Patrick Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Patrick Industries are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Patrick Industries disclosed solid returns over the last few months and may actually be approaching a breakup point.

PDF Solutions

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in PDF Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, PDF Solutions may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Patrick Industries and PDF Solutions

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

The idea behind Patrick Industries and PDF Solutions 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.