Correlation Between Universal Display and Sabien Technology
Can any of the company-specific risk be diversified away by investing in both Universal Display and Sabien Technology 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 Sabien Technology 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 Sabien Technology Group, you can compare the effects of market volatilities on Universal Display and Sabien Technology 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 Sabien Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Sabien Technology.
Diversification Opportunities for Universal Display and Sabien Technology
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Universal and Sabien is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display Corp and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien Technology 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 Sabien Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabien Technology has no effect on the direction of Universal Display i.e., Universal Display and Sabien Technology go up and down completely randomly.
Pair Corralation between Universal Display and Sabien Technology
Assuming the 90 days trading horizon Universal Display Corp is expected to under-perform the Sabien Technology. But the stock apears to be less risky and, when comparing its historical volatility, Universal Display Corp is 1.02 times less risky than Sabien Technology. The stock trades about 0.0 of its potential returns per unit of risk. The Sabien Technology Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,225 in Sabien Technology Group on September 1, 2024 and sell it today you would lose (50.00) from holding Sabien Technology Group or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Universal Display Corp vs. Sabien Technology Group
Performance |
| Timeline |
| Universal Display Corp |
| Sabien Technology |
Universal Display and Sabien Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Sabien Technology
The main advantage of trading using opposite Universal Display and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Sabien Technology 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 Sabien Technology will offset losses from the drop in Sabien Technology's long position.| Universal Display vs. Uniper SE | Universal Display vs. Mulberry Group PLC | Universal Display vs. London Security Plc | Universal Display vs. Triad Group PLC |
| Sabien Technology vs. Synchrony Financial | Sabien Technology vs. CleanTech Lithium plc | Sabien Technology vs. Virgin Wines UK | Sabien Technology vs. BW Offshore |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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