Correlation Between Universal Display and PLAYMATES TOYS
Can any of the company-specific risk be diversified away by investing in both Universal Display and PLAYMATES TOYS 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 PLAYMATES TOYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and PLAYMATES TOYS, you can compare the effects of market volatilities on Universal Display and PLAYMATES TOYS 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 PLAYMATES TOYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and PLAYMATES TOYS.
Diversification Opportunities for Universal Display and PLAYMATES TOYS
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Universal and PLAYMATES is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS 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 PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of Universal Display i.e., Universal Display and PLAYMATES TOYS go up and down completely randomly.
Pair Corralation between Universal Display and PLAYMATES TOYS
Assuming the 90 days horizon Universal Display is expected to under-perform the PLAYMATES TOYS. But the stock apears to be less risky and, when comparing its historical volatility, Universal Display is 1.74 times less risky than PLAYMATES TOYS. The stock trades about -0.05 of its potential returns per unit of risk. The PLAYMATES TOYS is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 6.90 in PLAYMATES TOYS on December 12, 2024 and sell it today you would lose (0.80) from holding PLAYMATES TOYS or give up 11.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. PLAYMATES TOYS
Performance |
| Timeline |
| Universal Display |
| PLAYMATES TOYS |
Universal Display and PLAYMATES TOYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and PLAYMATES TOYS
The main advantage of trading using opposite Universal Display and PLAYMATES TOYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, PLAYMATES TOYS 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 PLAYMATES TOYS will offset losses from the drop in PLAYMATES TOYS's long position.| Universal Display vs. Elmos Semiconductor SE | ||
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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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