Correlation Between UTStarcom Holdings and Fibra Plus

Can any of the company-specific risk be diversified away by investing in both UTStarcom Holdings and Fibra Plus 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 Fibra Plus 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 Fibra Plus, you can compare the effects of market volatilities on UTStarcom Holdings and Fibra Plus 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 Fibra Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of UTStarcom Holdings and Fibra Plus.

Diversification Opportunities for UTStarcom Holdings and Fibra Plus

-0.66

Correlation Coefficient

UTStarcom Holdings  Fibra Plus

Excellent diversification

The 3 months correlation between UTStarcom and Fibra is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding UTStarcom Holdings Corp and Fibra Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fibra Plus 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 Fibra Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fibra Plus has no effect on the direction of UTStarcom Holdings i.e., UTStarcom Holdings and Fibra Plus go up and down completely randomly.

Pair Corralation between UTStarcom Holdings and Fibra Plus

If you would invest  568.00  in Fibra Plus on September 23, 2024 and sell it today you would earn a total of  95.00  from holding Fibra Plus or generate 16.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

UTStarcom Holdings Corp  vs.  Fibra Plus

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.

Fibra Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fibra Plus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Fibra Plus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with UTStarcom Holdings and Fibra Plus

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

The idea behind UTStarcom Holdings Corp and Fibra Plus 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.

Check out your portfolio center.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.