Correlation Between Grupo Carso and UTStarcom Holdings

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

By analyzing existing cross correlation between Grupo Carso SAB and UTStarcom Holdings Corp, you can compare the effects of market volatilities on Grupo Carso and UTStarcom Holdings 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 Grupo Carso with a short position of UTStarcom Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and UTStarcom Holdings.

Diversification Opportunities for Grupo Carso and UTStarcom Holdings

0.15

Correlation Coefficient

Grupo Carso  UTStarcom Holdings

Average diversification

The 3 months correlation between Grupo and UTStarcom is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and UTStarcom Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTStarcom Holdings Corp and Grupo Carso 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 Grupo Carso SAB are associated (or correlated) with UTStarcom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTStarcom Holdings Corp has no effect on the direction of Grupo Carso i.e., Grupo Carso and UTStarcom Holdings go up and down completely randomly.

Pair Corralation between Grupo Carso and UTStarcom Holdings

Assuming the 90 days trading horizon Grupo Carso SAB is expected to generate 0.85 times more return on investment than UTStarcom Holdings. However, Grupo Carso SAB is 1.18 times less risky than UTStarcom Holdings. It trades about 0.05 of its potential returns per unit of risk. UTStarcom Holdings Corp is currently generating about -0.17 per unit of risk. If you would invest  11,253  in Grupo Carso SAB on December 26, 2024 and sell it today you would earn a total of  504.00  from holding Grupo Carso SAB or generate 4.48% return on investment over 90 days.

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

Grupo Carso SAB  vs.  UTStarcom Holdings Corp

Grupo Carso SAB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Grupo Carso is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

UTStarcom Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days UTStarcom Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Grupo Carso and UTStarcom Holdings

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

The idea behind Grupo Carso SAB and UTStarcom Holdings Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.