Correlation Between UTStarcom Holdings and BHP

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

Diversification Opportunities for UTStarcom Holdings and BHP

0.72

Correlation Coefficient

UTStarcom Holdings  BHP

Poor diversification

The 3 months correlation between UTStarcom and BHP is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding UTStarcom Holdings Corp and BHP Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group 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 BHP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group has no effect on the direction of UTStarcom Holdings i.e., UTStarcom Holdings and BHP go up and down completely randomly.

Pair Corralation between UTStarcom Holdings and BHP

If you would invest  113,920  in BHP Group on September 26, 2024 and sell it today you would earn a total of  0.00  from holding BHP Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

UTStarcom Holdings Corp  vs.  BHP Group

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 unsteady basic indicators, UTStarcom Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BHP Group

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days BHP Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, BHP 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 BHP

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

The idea behind UTStarcom Holdings Corp and BHP Group 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.