Correlation Between 3I Group and Universal Display
Can any of the company-specific risk be diversified away by investing in both 3I Group 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 3I Group and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3I Group PLC and Universal Display Corp, you can compare the effects of market volatilities on 3I Group 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 3I Group with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3I Group and Universal Display.
Diversification Opportunities for 3I Group and Universal Display
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between III and Universal is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding 3I Group PLC and Universal Display Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display Corp and 3I Group 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 3I Group PLC 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 Corp has no effect on the direction of 3I Group i.e., 3I Group and Universal Display go up and down completely randomly.
Pair Corralation between 3I Group and Universal Display
Assuming the 90 days trading horizon 3I Group PLC is expected to generate 0.51 times more return on investment than Universal Display. However, 3I Group PLC is 1.98 times less risky than Universal Display. It trades about 0.14 of its potential returns per unit of risk. Universal Display Corp is currently generating about 0.03 per unit of risk. If you would invest 156,979 in 3I Group PLC on November 8, 2024 and sell it today you would earn a total of 239,521 from holding 3I Group PLC or generate 152.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.92% |
| Values | Daily Returns |
3I Group PLC vs. Universal Display Corp
Performance |
| Timeline |
| 3I Group PLC |
| Universal Display Corp |
3I Group and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3I Group and Universal Display
The main advantage of trading using opposite 3I Group and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3I Group 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.| 3I Group vs. Golden Metal Resources | 3I Group vs. Iron Mountain | 3I Group vs. Dentsply Sirona | 3I Group vs. GoldMining |
| Universal Display vs. Associated British Foods | Universal Display vs. Ebro Foods | Universal Display vs. CNH Industrial NV | Universal Display vs. Tyson Foods Cl |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |