Correlation Between MeVis Medical and Universal Display
Can any of the company-specific risk be diversified away by investing in both MeVis Medical 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 MeVis Medical and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MeVis Medical Solutions and Universal Display, you can compare the effects of market volatilities on MeVis Medical 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 MeVis Medical with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and Universal Display.
Diversification Opportunities for MeVis Medical and Universal Display
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MeVis and Universal is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display and MeVis Medical 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 MeVis Medical Solutions 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 MeVis Medical i.e., MeVis Medical and Universal Display go up and down completely randomly.
Pair Corralation between MeVis Medical and Universal Display
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to generate 0.43 times more return on investment than Universal Display. However, MeVis Medical Solutions is 2.32 times less risky than Universal Display. It trades about 0.16 of its potential returns per unit of risk. Universal Display is currently generating about -0.09 per unit of risk. If you would invest 2,360 in MeVis Medical Solutions on September 5, 2024 and sell it today you would earn a total of 80.00 from holding MeVis Medical Solutions or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MeVis Medical Solutions vs. Universal Display
Performance |
| Timeline |
| MeVis Medical Solutions |
| Universal Display |
MeVis Medical and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and Universal Display
The main advantage of trading using opposite MeVis Medical and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical 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.| MeVis Medical vs. Universal Display | MeVis Medical vs. Collins Foods Limited | MeVis Medical vs. Playtech plc | MeVis Medical vs. Columbia Sportswear |
| Universal Display vs. ASML HOLDING NY | Universal Display vs. ASML Holding NV | Universal Display vs. Tokyo Electron Limited | Universal Display vs. Enphase Energy |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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