Correlation Between Zynex and Patterson Companies

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

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

Diversification Opportunities for Zynex and Patterson Companies

0.62

Correlation Coefficient

Zynex  Patterson Companies

Poor diversification

The 3 months correlation between Zynex and Patterson is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Zynex Inc and Patterson Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patterson Companies and Zynex 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 Zynex Inc are associated (or correlated) with Patterson Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patterson Companies has no effect on the direction of Zynex i.e., Zynex and Patterson Companies go up and down completely randomly.

Pair Corralation between Zynex and Patterson Companies

Given the investment horizon of 90 days Zynex Inc is expected to generate 1.41 times more return on investment than Patterson Companies. However, Zynex is 1.41 times more volatile than Patterson Companies. It trades about 0.08 of its potential returns per unit of risk. Patterson Companies is currently generating about -0.04 per unit of risk. If you would invest  836.00  in Zynex Inc on February 15, 2024 and sell it today you would earn a total of  250.00  from holding Zynex Inc or generate 29.9% return on investment over 90 days.

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

Zynex Inc  vs.  Patterson Companies

Zynex Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zynex Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Patterson Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patterson Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Zynex and Patterson Companies

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

The idea behind Zynex Inc and Patterson Companies 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.