Correlation Between Universal Display and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Universal Display and Alfa Financial 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 Universal Display and Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display Corp and Alfa Financial Software, you can compare the effects of market volatilities on Universal Display and Alfa Financial 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 Universal Display with a short position of Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Alfa Financial.
Diversification Opportunities for Universal Display and Alfa Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and Alfa is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display Corp and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software and Universal Display 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 Universal Display Corp are associated (or correlated) with Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Universal Display i.e., Universal Display and Alfa Financial go up and down completely randomly.
Pair Corralation between Universal Display and Alfa Financial
Assuming the 90 days trading horizon Universal Display is expected to generate 10.44 times less return on investment than Alfa Financial. In addition to that, Universal Display is 1.44 times more volatile than Alfa Financial Software. It trades about 0.01 of its total potential returns per unit of risk. Alfa Financial Software is currently generating about 0.09 per unit of volatility. If you would invest 21,700 in Alfa Financial Software on November 3, 2024 and sell it today you would earn a total of 650.00 from holding Alfa Financial Software or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Universal Display Corp vs. Alfa Financial Software
Performance |
| Timeline |
| Universal Display Corp |
| Alfa Financial Software |
Universal Display and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Alfa Financial
The main advantage of trading using opposite Universal Display and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Universal Display vs. Catena Media PLC | Universal Display vs. Atresmedia | Universal Display vs. G5 Entertainment AB | Universal Display vs. Bloomsbury Publishing Plc |
| Alfa Financial vs. iShares Physical Silver | Alfa Financial vs. Infrastrutture Wireless Italiane | Alfa Financial vs. Coeur Mining | Alfa Financial vs. Ecclesiastical Insurance Office |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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