Correlation Between Universal Display and Daktronics
Can any of the company-specific risk be diversified away by investing in both Universal Display and Daktronics 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 Daktronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and Daktronics, you can compare the effects of market volatilities on Universal Display and Daktronics 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 Daktronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Daktronics.
Diversification Opportunities for Universal Display and Daktronics
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and Daktronics is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and Daktronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daktronics 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 Daktronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daktronics has no effect on the direction of Universal Display i.e., Universal Display and Daktronics go up and down completely randomly.
Pair Corralation between Universal Display and Daktronics
Given the investment horizon of 90 days Universal Display is expected to under-perform the Daktronics. In addition to that, Universal Display is 1.26 times more volatile than Daktronics. It trades about -0.24 of its total potential returns per unit of risk. Daktronics is currently generating about 0.21 per unit of volatility. If you would invest 1,289 in Daktronics on August 24, 2024 and sell it today you would earn a total of 145.00 from holding Daktronics or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. Daktronics
Performance |
| Timeline |
| Universal Display |
| Daktronics |
Universal Display and Daktronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Daktronics
The main advantage of trading using opposite Universal Display and Daktronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Daktronics 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 Daktronics will offset losses from the drop in Daktronics' long position.| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
| Daktronics vs. Plexus Corp | Daktronics vs. OSI Systems | Daktronics vs. CTS Corporation | Daktronics vs. Benchmark Electronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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