Correlation Between Chuangs China and UNIVERSAL DISPLAY
Can any of the company-specific risk be diversified away by investing in both Chuangs China 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 Chuangs China and UNIVERSAL DISPLAY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and UNIVERSAL DISPLAY, you can compare the effects of market volatilities on Chuangs China 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 Chuangs China with a short position of UNIVERSAL DISPLAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and UNIVERSAL DISPLAY.
Diversification Opportunities for Chuangs China and UNIVERSAL DISPLAY
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chuangs and UNIVERSAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and UNIVERSAL DISPLAY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVERSAL DISPLAY and Chuangs China 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 Chuangs China Investments 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 Chuangs China i.e., Chuangs China and UNIVERSAL DISPLAY go up and down completely randomly.
Pair Corralation between Chuangs China and UNIVERSAL DISPLAY
Assuming the 90 days horizon Chuangs China Investments is expected to under-perform the UNIVERSAL DISPLAY. In addition to that, Chuangs China is 2.32 times more volatile than UNIVERSAL DISPLAY. It trades about -0.01 of its total potential returns per unit of risk. UNIVERSAL DISPLAY is currently generating about 0.02 per unit of volatility. If you would invest 12,678 in UNIVERSAL DISPLAY on November 1, 2024 and sell it today you would earn a total of 1,472 from holding UNIVERSAL DISPLAY or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chuangs China Investments vs. UNIVERSAL DISPLAY
Performance |
| Timeline |
| Chuangs China Investments |
| UNIVERSAL DISPLAY |
Chuangs China and UNIVERSAL DISPLAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and UNIVERSAL DISPLAY
The main advantage of trading using opposite Chuangs China and UNIVERSAL DISPLAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China 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.| Chuangs China vs. China Overseas Land | Chuangs China vs. Mitsui Fudosan Co | Chuangs China vs. Sino Land | Chuangs China vs. Hongkong Land Holdings |
| UNIVERSAL DISPLAY vs. CHINA TONTINE WINES | UNIVERSAL DISPLAY vs. DeVry Education Group | UNIVERSAL DISPLAY vs. Firan Technology Group | UNIVERSAL DISPLAY vs. EMBARK EDUCATION LTD |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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