Correlation Between Universal Display and Unum
Can any of the company-specific risk be diversified away by investing in both Universal Display and Unum 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 Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and Unum Group, you can compare the effects of market volatilities on Universal Display and Unum 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 Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Unum.
Diversification Opportunities for Universal Display and Unum
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and Unum is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Universal Display i.e., Universal Display and Unum go up and down completely randomly.
Pair Corralation between Universal Display and Unum
Given the investment horizon of 90 days Universal Display is expected to under-perform the Unum. In addition to that, Universal Display is 5.76 times more volatile than Unum Group. It trades about 0.0 of its total potential returns per unit of risk. Unum Group is currently generating about 0.07 per unit of volatility. If you would invest 2,417 in Unum Group on August 31, 2024 and sell it today you would earn a total of 112.00 from holding Unum Group or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. Unum Group
Performance |
| Timeline |
| Universal Display |
| Unum Group |
Universal Display and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Unum
The main advantage of trading using opposite Universal Display and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum's long position.| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
| Unum vs. AKITA Drilling | Unum vs. Nabors Industries | Unum vs. Getty Images Holdings | Unum vs. Precision Drilling |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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