Correlation Between Universal Display and United Parks
Can any of the company-specific risk be diversified away by investing in both Universal Display and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and United Parks Resorts, you can compare the effects of market volatilities on Universal Display and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and United Parks.
Diversification Opportunities for Universal Display and United Parks
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and United is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Universal Display i.e., Universal Display and United Parks go up and down completely randomly.
Pair Corralation between Universal Display and United Parks
Given the investment horizon of 90 days Universal Display is expected to under-perform the United Parks. In addition to that, Universal Display is 1.4 times more volatile than United Parks Resorts. It trades about 0.0 of its total potential returns per unit of risk. United Parks Resorts is currently generating about 0.04 per unit of volatility. If you would invest 5,341 in United Parks Resorts on September 1, 2024 and sell it today you would earn a total of 523.00 from holding United Parks Resorts or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. United Parks Resorts
Performance |
| Timeline |
| Universal Display |
| United Parks Resorts |
Universal Display and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and United Parks
The main advantage of trading using opposite Universal Display and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
| United Parks vs. Cracker Barrel Old | United Parks vs. Cementos Pacasmayo SAA | United Parks vs. BJs Restaurants | United Parks vs. Flexible Solutions International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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