Correlation Between International Flavors and Universal Display
Can any of the company-specific risk be diversified away by investing in both International Flavors 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 International Flavors and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Flavors Fragrances and Universal Display, you can compare the effects of market volatilities on International Flavors 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 International Flavors with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Flavors and Universal Display.
Diversification Opportunities for International Flavors and Universal Display
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Universal is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding International Flavors Fragranc and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display and International Flavors 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 International Flavors Fragrances 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 International Flavors i.e., International Flavors and Universal Display go up and down completely randomly.
Pair Corralation between International Flavors and Universal Display
Assuming the 90 days horizon International Flavors Fragrances is expected to under-perform the Universal Display. But the stock apears to be less risky and, when comparing its historical volatility, International Flavors Fragrances is 1.9 times less risky than Universal Display. The stock trades about -0.28 of its potential returns per unit of risk. The Universal Display is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14,315 in Universal Display on December 4, 2024 and sell it today you would earn a total of 200.00 from holding Universal Display or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Flavors Fragranc vs. Universal Display
Performance |
| Timeline |
| International Flavors |
| Universal Display |
International Flavors and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Flavors and Universal Display
The main advantage of trading using opposite International Flavors and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Flavors 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.| International Flavors vs. ARISTOCRAT LEISURE | International Flavors vs. ePlay Digital | International Flavors vs. PEPTONIC MEDICAL | International Flavors vs. Gaming and Leisure |
| Universal Display vs. ALBIS LEASING AG | Universal Display vs. United Rentals | Universal Display vs. WILLIS LEASE FIN | Universal Display vs. Media and Games |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |