Correlation Between Universal Display and Impax Asset
Can any of the company-specific risk be diversified away by investing in both Universal Display and Impax Asset 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 Impax Asset 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 Impax Asset Management, you can compare the effects of market volatilities on Universal Display and Impax Asset 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 Impax Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Impax Asset.
Diversification Opportunities for Universal Display and Impax Asset
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and Impax is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display Corp and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management 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 Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of Universal Display i.e., Universal Display and Impax Asset go up and down completely randomly.
Pair Corralation between Universal Display and Impax Asset
Assuming the 90 days trading horizon Universal Display Corp is expected to generate 0.91 times more return on investment than Impax Asset. However, Universal Display Corp is 1.1 times less risky than Impax Asset. It trades about 0.01 of its potential returns per unit of risk. Impax Asset Management is currently generating about -0.2 per unit of risk. If you would invest 14,997 in Universal Display Corp on November 3, 2024 and sell it today you would lose (34.00) from holding Universal Display Corp or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Universal Display Corp vs. Impax Asset Management
Performance |
| Timeline |
| Universal Display Corp |
| Impax Asset Management |
Universal Display and Impax Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Impax Asset
The main advantage of trading using opposite Universal Display and Impax Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Impax Asset 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 Impax Asset will offset losses from the drop in Impax Asset'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 |
| Impax Asset vs. URU Metals | Impax Asset vs. European Metals Holdings | Impax Asset vs. Charter Communications Cl | Impax Asset vs. GreenX Metals |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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