Correlation Between Universal Display and ScanSource
Can any of the company-specific risk be diversified away by investing in both Universal Display and ScanSource 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 ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and ScanSource, you can compare the effects of market volatilities on Universal Display and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and ScanSource.
Diversification Opportunities for Universal Display and ScanSource
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and ScanSource is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Universal Display i.e., Universal Display and ScanSource go up and down completely randomly.
Pair Corralation between Universal Display and ScanSource
Given the investment horizon of 90 days Universal Display is expected to under-perform the ScanSource. In addition to that, Universal Display is 1.26 times more volatile than ScanSource. It trades about -0.01 of its total potential returns per unit of risk. ScanSource is currently generating about 0.06 per unit of volatility. If you would invest 4,604 in ScanSource on September 5, 2024 and sell it today you would earn a total of 662.00 from holding ScanSource or generate 14.38% 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. ScanSource
Performance |
| Timeline |
| Universal Display |
| ScanSource |
Universal Display and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and ScanSource
The main advantage of trading using opposite Universal Display and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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