Correlation Between Universal Display and GP Act
Can any of the company-specific risk be diversified away by investing in both Universal Display and GP Act 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 GP Act into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and GP Act III Acquisition, you can compare the effects of market volatilities on Universal Display and GP Act 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 GP Act. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and GP Act.
Diversification Opportunities for Universal Display and GP Act
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and GPAT is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and GP Act III Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Act III 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 GP Act. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Act III has no effect on the direction of Universal Display i.e., Universal Display and GP Act go up and down completely randomly.
Pair Corralation between Universal Display and GP Act
Given the investment horizon of 90 days Universal Display is expected to under-perform the GP Act. In addition to that, Universal Display is 18.94 times more volatile than GP Act III Acquisition. It trades about -0.24 of its total potential returns per unit of risk. GP Act III Acquisition is currently generating about 0.36 per unit of volatility. If you would invest 1,007 in GP Act III Acquisition on September 4, 2024 and sell it today you would earn a total of 7.00 from holding GP Act III Acquisition or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. GP Act III Acquisition
Performance |
| Timeline |
| Universal Display |
| GP Act III |
Universal Display and GP Act Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and GP Act
The main advantage of trading using opposite Universal Display and GP Act positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, GP Act 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 GP Act will offset losses from the drop in GP Act's long position.| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
| GP Act vs. BRP Inc | GP Act vs. Universal Display | GP Act vs. CECO Environmental Corp | GP Act vs. Olympic Steel |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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