Correlation Between Universal Display and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both Universal Display and AfriTin Mining 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 AfriTin Mining 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 AfriTin Mining, you can compare the effects of market volatilities on Universal Display and AfriTin Mining 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 AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and AfriTin Mining.
Diversification Opportunities for Universal Display and AfriTin Mining
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Universal and AfriTin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display Corp and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining 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 AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Universal Display i.e., Universal Display and AfriTin Mining go up and down completely randomly.
Pair Corralation between Universal Display and AfriTin Mining
Assuming the 90 days trading horizon Universal Display Corp is expected to generate 0.83 times more return on investment than AfriTin Mining. However, Universal Display Corp is 1.2 times less risky than AfriTin Mining. It trades about 0.03 of its potential returns per unit of risk. AfriTin Mining is currently generating about -0.04 per unit of risk. If you would invest 13,513 in Universal Display Corp on August 31, 2024 and sell it today you would earn a total of 2,687 from holding Universal Display Corp or generate 19.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 87.44% |
| Values | Daily Returns |
Universal Display Corp vs. AfriTin Mining
Performance |
| Timeline |
| Universal Display Corp |
| AfriTin Mining |
Universal Display and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and AfriTin Mining
The main advantage of trading using opposite Universal Display and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| Universal Display vs. Neometals | Universal Display vs. Coor Service Management | Universal Display vs. Aeorema Communications Plc | Universal Display vs. JLEN Environmental Assets |
| AfriTin Mining vs. Jacquet Metal Service | AfriTin Mining vs. Bisichi Mining PLC | AfriTin Mining vs. Anglesey Mining | AfriTin Mining vs. Flow Traders NV |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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