Correlation Between Universal Electronics and GoPro
Can any of the company-specific risk be diversified away by investing in both Universal Electronics and GoPro 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 Electronics and GoPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Electronics and GoPro Inc, you can compare the effects of market volatilities on Universal Electronics and GoPro 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 Electronics with a short position of GoPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Electronics and GoPro.
Diversification Opportunities for Universal Electronics and GoPro
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and GoPro is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Universal Electronics and GoPro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoPro Inc and Universal Electronics 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 Electronics are associated (or correlated) with GoPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoPro Inc has no effect on the direction of Universal Electronics i.e., Universal Electronics and GoPro go up and down completely randomly.
Pair Corralation between Universal Electronics and GoPro
Given the investment horizon of 90 days Universal Electronics is expected to generate 0.95 times more return on investment than GoPro. However, Universal Electronics is 1.05 times less risky than GoPro. It trades about -0.21 of its potential returns per unit of risk. GoPro Inc is currently generating about -0.29 per unit of risk. If you would invest 1,089 in Universal Electronics on November 3, 2024 and sell it today you would lose (89.00) from holding Universal Electronics or give up 8.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Electronics vs. GoPro Inc
Performance |
| Timeline |
| Universal Electronics |
| GoPro Inc |
Universal Electronics and GoPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Electronics and GoPro
The main advantage of trading using opposite Universal Electronics and GoPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Electronics position performs unexpectedly, GoPro 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 GoPro will offset losses from the drop in GoPro's long position.| Universal Electronics vs. LG Display Co | Universal Electronics vs. Zepp Health Corp | Universal Electronics vs. Sonos Inc | Universal Electronics vs. VOXX International |
| GoPro vs. Sony Group Corp | GoPro vs. LG Display Co | GoPro vs. Universal Electronics | GoPro vs. VOXX 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |