Correlation Between Southern Copper and UTStarcom Holdings
Can any of the company-specific risk be diversified away by investing in both Southern Copper 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 Southern Copper and UTStarcom Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper and UTStarcom Holdings Corp, you can compare the effects of market volatilities on Southern Copper 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 Southern Copper with a short position of UTStarcom Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and UTStarcom Holdings.
Diversification Opportunities for Southern Copper and UTStarcom Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southern and UTStarcom is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper 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 Southern Copper 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 Southern Copper 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 Southern Copper i.e., Southern Copper and UTStarcom Holdings go up and down completely randomly.
Pair Corralation between Southern Copper and UTStarcom Holdings
Assuming the 90 days trading horizon Southern Copper is expected to generate 0.93 times more return on investment than UTStarcom Holdings. However, Southern Copper is 1.08 times less risky than UTStarcom Holdings. It trades about -0.2 of its potential returns per unit of risk. UTStarcom Holdings Corp is currently generating about -0.21 per unit of risk. If you would invest 212,001 in Southern Copper on November 28, 2024 and sell it today you would lose (14,191) from holding Southern Copper or give up 6.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Copper vs. UTStarcom Holdings Corp
Performance |
| Timeline |
| Southern Copper |
| UTStarcom Holdings Corp |
Southern Copper and UTStarcom Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and UTStarcom Holdings
The main advantage of trading using opposite Southern Copper and UTStarcom Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper 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.| Southern Copper vs. Grupo Industrial Saltillo | Southern Copper vs. Grupo Sports World | Southern Copper vs. Cognizant Technology Solutions | Southern Copper vs. Burlington Stores |
| UTStarcom Holdings vs. New Oriental Education | UTStarcom Holdings vs. Micron Technology | UTStarcom Holdings vs. GMxico Transportes SAB | UTStarcom Holdings vs. CVS Health |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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