Correlation Between UTStarcom Holdings and Credicorp

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

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

Diversification Opportunities for UTStarcom Holdings and Credicorp

0.25

Correlation Coefficient

UTStarcom Holdings  Credicorp

Modest diversification

The 3 months correlation between UTStarcom and Credicorp is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding UTStarcom Holdings Corp and Credicorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credicorp and UTStarcom Holdings 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 UTStarcom Holdings Corp are associated (or correlated) with Credicorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credicorp has no effect on the direction of UTStarcom Holdings i.e., UTStarcom Holdings and Credicorp go up and down completely randomly.

Pair Corralation between UTStarcom Holdings and Credicorp

Assuming the 90 days trading horizon UTStarcom Holdings Corp is expected to under-perform the Credicorp. But the stock apears to be less risky and, when comparing its historical volatility, UTStarcom Holdings Corp is 1.02 times less risky than Credicorp. The stock trades about -0.01 of its potential returns per unit of risk. The Credicorp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  275,120  in Credicorp on September 24, 2024 and sell it today you would earn a total of  88,880  from holding Credicorp or generate 32.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

UTStarcom Holdings Corp  vs.  Credicorp

UTStarcom Holdings Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UTStarcom Holdings Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, UTStarcom Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Credicorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Credicorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Credicorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with UTStarcom Holdings and Credicorp

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

The idea behind UTStarcom Holdings Corp and Credicorp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.