Correlation Between ONEOK and Universal Display
Can any of the company-specific risk be diversified away by investing in both ONEOK and Universal Display 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 ONEOK and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Universal Display Corp, you can compare the effects of market volatilities on ONEOK and Universal Display 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 ONEOK with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Universal Display.
Diversification Opportunities for ONEOK and Universal Display
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ONEOK and Universal is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Universal Display Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display Corp and ONEOK 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 ONEOK Inc are associated (or correlated) with Universal Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Display Corp has no effect on the direction of ONEOK i.e., ONEOK and Universal Display go up and down completely randomly.
Pair Corralation between ONEOK and Universal Display
Assuming the 90 days trading horizon ONEOK Inc is expected to generate 0.82 times more return on investment than Universal Display. However, ONEOK Inc is 1.22 times less risky than Universal Display. It trades about 0.13 of its potential returns per unit of risk. Universal Display Corp is currently generating about 0.04 per unit of risk. If you would invest 10,066 in ONEOK Inc on October 28, 2024 and sell it today you would earn a total of 387.00 from holding ONEOK Inc or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
ONEOK Inc vs. Universal Display Corp
Performance |
| Timeline |
| ONEOK Inc |
| Universal Display Corp |
ONEOK and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Universal Display
The main advantage of trading using opposite ONEOK and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Universal Display 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 Universal Display will offset losses from the drop in Universal Display's long position.| ONEOK vs. Compagnie Plastic Omnium | ONEOK vs. Smithson Investment Trust | ONEOK vs. Bloomsbury Publishing Plc | ONEOK vs. Software Circle plc |
| Universal Display vs. Berkshire Hathaway | Universal Display vs. Samsung Electronics Co | Universal Display vs. Samsung Electronics Co | Universal Display vs. Chocoladefabriken Lindt Spruengli |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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