Correlation Between SWISS WATER and Universal Display
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and Universal Display, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Universal Display.
Diversification Opportunities for SWISS WATER and Universal Display
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SWISS and Universal is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display and SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 has no effect on the direction of SWISS WATER i.e., SWISS WATER and Universal Display go up and down completely randomly.
Pair Corralation between SWISS WATER and Universal Display
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the Universal Display. In addition to that, SWISS WATER is 1.25 times more volatile than Universal Display. It trades about -0.09 of its total potential returns per unit of risk. Universal Display is currently generating about -0.01 per unit of volatility. If you would invest 14,845 in Universal Display on November 8, 2024 and sell it today you would lose (140.00) from holding Universal Display or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. Universal Display
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| Universal Display |
SWISS WATER and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and Universal Display
The main advantage of trading using opposite SWISS WATER and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. SPORTING | SWISS WATER vs. Verizon Communications | SWISS WATER vs. PARKEN Sport Entertainment | SWISS WATER vs. NTG Nordic Transport |
| Universal Display vs. ASML HOLDING NY | Universal Display vs. ASML Holding NV | Universal Display vs. ASML Holding NV | Universal Display vs. Applied Materials |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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