Correlation Between Sligro Food and Universal Display
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Universal Display 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 Sligro Food and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and Universal Display Corp, you can compare the effects of market volatilities on Sligro Food and Universal Display 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 Sligro Food with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Universal Display.
Diversification Opportunities for Sligro Food and Universal Display
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sligro and Universal is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Universal Display Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display Corp and Sligro Food 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 Sligro Food Group are associated (or correlated) with Universal Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Display Corp has no effect on the direction of Sligro Food i.e., Sligro Food and Universal Display go up and down completely randomly.
Pair Corralation between Sligro Food and Universal Display
Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Universal Display. But the stock apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 2.08 times less risky than Universal Display. The stock trades about -0.04 of its potential returns per unit of risk. The Universal Display Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 16,527 in Universal Display Corp on November 3, 2024 and sell it today you would lose (1,564) from holding Universal Display Corp or give up 9.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.03% |
| Values | Daily Returns |
Sligro Food Group vs. Universal Display Corp
Performance |
| Timeline |
| Sligro Food Group |
| Universal Display Corp |
Sligro Food and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Universal Display
The main advantage of trading using opposite Sligro Food and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Universal Display 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 Universal Display will offset losses from the drop in Universal Display's long position.| Sligro Food vs. LPKF Laser Electronics | Sligro Food vs. Flutter Entertainment PLC | Sligro Food vs. Ecclesiastical Insurance Office | Sligro Food vs. Intermediate Capital Group |
| Universal Display vs. Cognizant Technology Solutions | Universal Display vs. PPHE Hotel Group | Universal Display vs. Bytes Technology | Universal Display vs. Spotify Technology SA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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