Correlation Between Bank of America and UTStarcom Holdings
Can any of the company-specific risk be diversified away by investing in both Bank of America 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 Bank of America and UTStarcom Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and UTStarcom Holdings Corp, you can compare the effects of market volatilities on Bank of America 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 Bank of America with a short position of UTStarcom Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and UTStarcom Holdings.
Diversification Opportunities for Bank of America and UTStarcom Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and UTStarcom is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America 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 Bank of America 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 Bank of America 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 Bank of America i.e., Bank of America and UTStarcom Holdings go up and down completely randomly.
Pair Corralation between Bank of America and UTStarcom Holdings
Considering the 90-day investment horizon Bank of America is expected to generate 0.61 times more return on investment than UTStarcom Holdings. However, Bank of America is 1.63 times less risky than UTStarcom Holdings. It trades about 0.12 of its potential returns per unit of risk. UTStarcom Holdings Corp is currently generating about -0.01 per unit of risk. If you would invest 3,409 in Bank of America on August 27, 2024 and sell it today you would earn a total of 1,291 from holding Bank of America or generate 37.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Bank of America vs. UTStarcom Holdings Corp
Performance |
| Timeline |
| Bank of America |
| UTStarcom Holdings Corp |
Bank of America and UTStarcom Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and UTStarcom Holdings
The main advantage of trading using opposite Bank of America and UTStarcom Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America 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.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| UTStarcom Holdings vs. Cisco Systems | UTStarcom Holdings vs. The Select Sector | UTStarcom Holdings vs. Promotora y Operadora | UTStarcom Holdings vs. iShares Global Timber |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |