Correlation Between Universal Display and Thunder Gold
Can any of the company-specific risk be diversified away by investing in both Universal Display and Thunder Gold 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 Thunder Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and Thunder Gold Corp, you can compare the effects of market volatilities on Universal Display and Thunder Gold 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 Thunder Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Thunder Gold.
Diversification Opportunities for Universal Display and Thunder Gold
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Universal and Thunder is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and Thunder Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Gold Corp 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 Thunder Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Gold Corp has no effect on the direction of Universal Display i.e., Universal Display and Thunder Gold go up and down completely randomly.
Pair Corralation between Universal Display and Thunder Gold
Given the investment horizon of 90 days Universal Display is expected to under-perform the Thunder Gold. But the stock apears to be less risky and, when comparing its historical volatility, Universal Display is 8.75 times less risky than Thunder Gold. The stock trades about 0.0 of its potential returns per unit of risk. The Thunder Gold Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Thunder Gold Corp on August 25, 2024 and sell it today you would earn a total of 0.67 from holding Thunder Gold Corp or generate 33.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Universal Display vs. Thunder Gold Corp
Performance |
| Timeline |
| Universal Display |
| Thunder Gold Corp |
Universal Display and Thunder Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Thunder Gold
The main advantage of trading using opposite Universal Display and Thunder Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Thunder Gold 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 Thunder Gold will offset losses from the drop in Thunder Gold's long position.| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
| Thunder Gold vs. National Vision Holdings | Thunder Gold vs. Universal Display | Thunder Gold vs. Cedar Realty Trust | Thunder Gold vs. Canlan Ice Sports |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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