Correlation Between PDF Solutions and Patrick Industries

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

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

Diversification Opportunities for PDF Solutions and Patrick Industries

0.86

Correlation Coefficient

PDF Solutions  Patrick Industries

Very poor diversification

The 3 months correlation between PDF and Patrick is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding PDF Solutions and Patrick Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patrick Industries and PDF Solutions 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 PDF Solutions are associated (or correlated) with Patrick Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patrick Industries has no effect on the direction of PDF Solutions i.e., PDF Solutions and Patrick Industries go up and down completely randomly.

Pair Corralation between PDF Solutions and Patrick Industries

Given the investment horizon of 90 days PDF Solutions is expected to generate 3.15 times less return on investment than Patrick Industries. In addition to that, PDF Solutions is 1.46 times more volatile than Patrick Industries. It trades about 0.02 of its total potential returns per unit of risk. Patrick Industries is currently generating about 0.11 per unit of volatility. If you would invest  8,940  in Patrick Industries on May 13, 2025 and sell it today you would earn a total of  1,097  from holding Patrick Industries or generate 12.27% return on investment over 90 days.

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

PDF Solutions  vs.  Patrick Industries

PDF Solutions

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PDF Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, PDF Solutions is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Patrick Industries

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Patrick Industries are ranked lower than 8 (%) 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.

Pair Trading with PDF Solutions and Patrick Industries

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

The idea behind PDF Solutions and Patrick Industries 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.