Correlation Between Oakley Capital and Universal Display
Can any of the company-specific risk be diversified away by investing in both Oakley Capital 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 Oakley Capital and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Universal Display Corp, you can compare the effects of market volatilities on Oakley Capital 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 Oakley Capital with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Universal Display.
Diversification Opportunities for Oakley Capital and Universal Display
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oakley and Universal is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments 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 Oakley Capital 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 Oakley Capital Investments 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 Oakley Capital i.e., Oakley Capital and Universal Display go up and down completely randomly.
Pair Corralation between Oakley Capital and Universal Display
Assuming the 90 days trading horizon Oakley Capital Investments is expected to generate 0.22 times more return on investment than Universal Display. However, Oakley Capital Investments is 4.46 times less risky than Universal Display. It trades about -0.31 of its potential returns per unit of risk. Universal Display Corp is currently generating about -0.19 per unit of risk. If you would invest 49,600 in Oakley Capital Investments on September 4, 2024 and sell it today you would lose (1,600) from holding Oakley Capital Investments or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oakley Capital Investments vs. Universal Display Corp
Performance |
| Timeline |
| Oakley Capital Inves |
| Universal Display Corp |
Oakley Capital and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Universal Display
The main advantage of trading using opposite Oakley Capital and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital 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.| Oakley Capital vs. SupplyMe Capital PLC | Oakley Capital vs. Lloyds Banking Group | Oakley Capital vs. Premier African Minerals | Oakley Capital vs. SANTANDER UK 8 |
| Universal Display vs. Samsung Electronics Co | Universal Display vs. Samsung Electronics Co | Universal Display vs. Hyundai Motor | Universal Display vs. Toyota Motor Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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