Correlation Between UTStarcom Holdings and Aviat Networks
Can any of the company-specific risk be diversified away by investing in both UTStarcom Holdings and Aviat Networks 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 Aviat Networks 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 Aviat Networks, you can compare the effects of market volatilities on UTStarcom Holdings and Aviat Networks 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 Aviat Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of UTStarcom Holdings and Aviat Networks.
Diversification Opportunities for UTStarcom Holdings and Aviat Networks
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between UTStarcom and Aviat is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding UTStarcom Holdings Corp and Aviat Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviat Networks 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 Aviat Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aviat Networks has no effect on the direction of UTStarcom Holdings i.e., UTStarcom Holdings and Aviat Networks go up and down completely randomly.
Pair Corralation between UTStarcom Holdings and Aviat Networks
Given the investment horizon of 90 days UTStarcom Holdings Corp is expected to generate 0.55 times more return on investment than Aviat Networks. However, UTStarcom Holdings Corp is 1.83 times less risky than Aviat Networks. It trades about 0.05 of its potential returns per unit of risk. Aviat Networks is currently generating about -0.11 per unit of risk. If you would invest 291.00 in UTStarcom Holdings Corp on August 31, 2024 and sell it today you would earn a total of 9.00 from holding UTStarcom Holdings Corp or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
UTStarcom Holdings Corp vs. Aviat Networks
Performance |
| Timeline |
| UTStarcom Holdings Corp |
| Aviat Networks |
UTStarcom Holdings and Aviat Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UTStarcom Holdings and Aviat Networks
The main advantage of trading using opposite UTStarcom Holdings and Aviat Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UTStarcom Holdings position performs unexpectedly, Aviat Networks 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 Aviat Networks will offset losses from the drop in Aviat Networks' long position.| UTStarcom Holdings vs. Aviat Networks | UTStarcom Holdings vs. Silicom | UTStarcom Holdings vs. Akoustis Technologies | UTStarcom Holdings vs. Gilat Satellite Networks |
| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Akoustis Technologies | Aviat Networks vs. Gilat Satellite Networks |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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