Correlation Between Universal Display and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Universal Display and Capital Clean 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 Universal Display and Capital Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and Capital Clean Energy, you can compare the effects of market volatilities on Universal Display and Capital Clean 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 Universal Display with a short position of Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Capital Clean.
Diversification Opportunities for Universal Display and Capital Clean
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Universal and Capital is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy and Universal Display 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 Universal Display are associated (or correlated) with Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Universal Display i.e., Universal Display and Capital Clean go up and down completely randomly.
Pair Corralation between Universal Display and Capital Clean
Given the investment horizon of 90 days Universal Display is expected to under-perform the Capital Clean. In addition to that, Universal Display is 2.36 times more volatile than Capital Clean Energy. It trades about -0.24 of its total potential returns per unit of risk. Capital Clean Energy is currently generating about -0.04 per unit of volatility. If you would invest 1,892 in Capital Clean Energy on August 24, 2024 and sell it today you would lose (25.00) from holding Capital Clean Energy or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. Capital Clean Energy
Performance |
| Timeline |
| Universal Display |
| Capital Clean Energy |
Universal Display and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Capital Clean
The main advantage of trading using opposite Universal Display and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
| Capital Clean vs. SNDL Inc | Capital Clean vs. Alvotech | Capital Clean vs. Cardinal Health | Capital Clean vs. Corporacion America Airports |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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