Correlation Between Enphase Energy and Universal Display
Can any of the company-specific risk be diversified away by investing in both Enphase Energy 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 Enphase Energy and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and Universal Display, you can compare the effects of market volatilities on Enphase Energy 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 Enphase Energy with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and Universal Display.
Diversification Opportunities for Enphase Energy and Universal Display
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enphase and Universal is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display and Enphase Energy 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 Enphase Energy 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 Enphase Energy i.e., Enphase Energy and Universal Display go up and down completely randomly.
Pair Corralation between Enphase Energy and Universal Display
Assuming the 90 days horizon Enphase Energy is expected to under-perform the Universal Display. In addition to that, Enphase Energy is 2.51 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 -0.09 per unit of volatility. If you would invest 16,485 in Universal Display on September 5, 2024 and sell it today you would lose (785.00) from holding Universal Display or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. Universal Display
Performance |
| Timeline |
| Enphase Energy |
| Universal Display |
Enphase Energy and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and Universal Display
The main advantage of trading using opposite Enphase Energy and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy 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.| Enphase Energy vs. Elmos Semiconductor SE | Enphase Energy vs. Columbia Sportswear | Enphase Energy vs. SPORT LISBOA E | Enphase Energy vs. Taiwan Semiconductor Manufacturing |
| Universal Display vs. ASML Holding NV | Universal Display vs. Tokyo Electron Limited | Universal Display vs. Enphase Energy | Universal Display vs. ASM International NV |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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