Correlation Between Corning Incorporated and Universal Display
Can any of the company-specific risk be diversified away by investing in both Corning Incorporated 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 Corning Incorporated and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corning Incorporated and Universal Display, you can compare the effects of market volatilities on Corning Incorporated 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 Corning Incorporated with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corning Incorporated and Universal Display.
Diversification Opportunities for Corning Incorporated and Universal Display
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Corning and Universal is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display and Corning Incorporated 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 Corning Incorporated 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 Corning Incorporated i.e., Corning Incorporated and Universal Display go up and down completely randomly.
Pair Corralation between Corning Incorporated and Universal Display
Considering the 90-day investment horizon Corning Incorporated is expected to generate 1.32 times less return on investment than Universal Display. But when comparing it to its historical volatility, Corning Incorporated is 1.55 times less risky than Universal Display. It trades about 0.06 of its potential returns per unit of risk. Universal Display is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11,011 in Universal Display on August 28, 2024 and sell it today you would earn a total of 5,923 from holding Universal Display or generate 53.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corning Incorporated vs. Universal Display
Performance |
| Timeline |
| Corning Incorporated |
| Universal Display |
Corning Incorporated and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corning Incorporated and Universal Display
The main advantage of trading using opposite Corning Incorporated and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corning Incorporated 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.| Corning Incorporated vs. Jabil Circuit | Corning Incorporated vs. Sanmina | Corning Incorporated vs. Methode Electronics |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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