Correlation Between AudioCodes and Utron

Can any of the company-specific risk be diversified away by investing in both AudioCodes and Utron 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 AudioCodes and Utron into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AudioCodes and Utron, you can compare the effects of market volatilities on AudioCodes and Utron 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 AudioCodes with a short position of Utron. Check out your portfolio center. Please also check ongoing floating volatility patterns of AudioCodes and Utron.

Diversification Opportunities for AudioCodes and Utron

-0.2

Correlation Coefficient

AudioCodes  Utron

Good diversification

The 3 months correlation between AudioCodes and Utron is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding AudioCodes and Utron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utron and AudioCodes 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 AudioCodes are associated (or correlated) with Utron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utron has no effect on the direction of AudioCodes i.e., AudioCodes and Utron go up and down completely randomly.

Pair Corralation between AudioCodes and Utron

Assuming the 90 days trading horizon AudioCodes is expected to generate 1.05 times more return on investment than Utron. However, AudioCodes is 1.05 times more volatile than Utron. It trades about 0.06 of its potential returns per unit of risk. Utron is currently generating about 0.03 per unit of risk. If you would invest  307,038  in AudioCodes on May 16, 2025 and sell it today you would earn a total of  24,794  from holding AudioCodes or generate 8.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.04%
Values	Daily Returns

AudioCodes  vs.  Utron

AudioCodes

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in AudioCodes are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AudioCodes sustained solid returns over the last few months and may actually be approaching a breakup point.

Utron

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Utron are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Utron is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AudioCodes and Utron

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

The idea behind AudioCodes and Utron 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.