Correlation Between UTStarcom Holdings and China Yuchai
Can any of the company-specific risk be diversified away by investing in both UTStarcom Holdings and China Yuchai 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 China Yuchai 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 China Yuchai International, you can compare the effects of market volatilities on UTStarcom Holdings and China Yuchai 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 China Yuchai. Check out your portfolio center. Please also check ongoing floating volatility patterns of UTStarcom Holdings and China Yuchai.
Diversification Opportunities for UTStarcom Holdings and China Yuchai
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UTStarcom and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding UTStarcom Holdings Corp and China Yuchai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Yuchai Interna 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 China Yuchai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Yuchai Interna has no effect on the direction of UTStarcom Holdings i.e., UTStarcom Holdings and China Yuchai go up and down completely randomly.
Pair Corralation between UTStarcom Holdings and China Yuchai
Given the investment horizon of 90 days UTStarcom Holdings Corp is expected to under-perform the China Yuchai. But the stock apears to be less risky and, when comparing its historical volatility, UTStarcom Holdings Corp is 1.31 times less risky than China Yuchai. The stock trades about -0.04 of its potential returns per unit of risk. The China Yuchai International is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 981.00 in China Yuchai International on November 5, 2024 and sell it today you would earn a total of 114.00 from holding China Yuchai International or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UTStarcom Holdings Corp vs. China Yuchai International
Performance |
| Timeline |
| UTStarcom Holdings Corp |
| China Yuchai Interna |
UTStarcom Holdings and China Yuchai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UTStarcom Holdings and China Yuchai
The main advantage of trading using opposite UTStarcom Holdings and China Yuchai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UTStarcom Holdings position performs unexpectedly, China Yuchai 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 China Yuchai will offset losses from the drop in China Yuchai's long position.| UTStarcom Holdings vs. KVH Industries | UTStarcom Holdings vs. Telesat Corp | UTStarcom Holdings vs. Mynaric AG ADR | UTStarcom Holdings vs. Knowles Cor |
| China Yuchai vs. China Automotive Systems | China Yuchai vs. China Natural Resources | China Yuchai vs. Sonida Senior Living | China Yuchai vs. UTStarcom Holdings Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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