Correlation Between Universal Display and Burberry Group
Can any of the company-specific risk be diversified away by investing in both Universal Display and Burberry Group 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 Burberry Group 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 Burberry Group PLC, you can compare the effects of market volatilities on Universal Display and Burberry Group 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 Burberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Burberry Group.
Diversification Opportunities for Universal Display and Burberry Group
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and Burberry is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display Corp and Burberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burberry Group PLC 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 Burberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burberry Group PLC has no effect on the direction of Universal Display i.e., Universal Display and Burberry Group go up and down completely randomly.
Pair Corralation between Universal Display and Burberry Group
Assuming the 90 days trading horizon Universal Display Corp is expected to under-perform the Burberry Group. But the stock apears to be less risky and, when comparing its historical volatility, Universal Display Corp is 1.63 times less risky than Burberry Group. The stock trades about -0.24 of its potential returns per unit of risk. The Burberry Group PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 78,680 in Burberry Group PLC on August 28, 2024 and sell it today you would earn a total of 11,400 from holding Burberry Group PLC or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display Corp vs. Burberry Group PLC
Performance |
| Timeline |
| Universal Display Corp |
| Burberry Group PLC |
Universal Display and Burberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Burberry Group
The main advantage of trading using opposite Universal Display and Burberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Burberry Group 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 Burberry Group will offset losses from the drop in Burberry Group's long position.| Universal Display vs. Samsung Electronics Co | Universal Display vs. Samsung Electronics Co | Universal Display vs. Hyundai Motor | Universal Display vs. Toyota Motor Corp |
| Burberry Group vs. Toyota Motor Corp | Burberry Group vs. SoftBank Group Corp | Burberry Group vs. OTP Bank Nyrt | Burberry Group vs. Las Vegas Sands |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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