Correlation Between Universal Display and AGF Management
Can any of the company-specific risk be diversified away by investing in both Universal Display and AGF Management 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 AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and AGF Management Limited, you can compare the effects of market volatilities on Universal Display and AGF Management 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 AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and AGF Management.
Diversification Opportunities for Universal Display and AGF Management
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and AGF is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management 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 AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of Universal Display i.e., Universal Display and AGF Management go up and down completely randomly.
Pair Corralation between Universal Display and AGF Management
Assuming the 90 days horizon Universal Display is expected to generate 1.73 times more return on investment than AGF Management. However, Universal Display is 1.73 times more volatile than AGF Management Limited. It trades about -0.01 of its potential returns per unit of risk. AGF Management Limited is currently generating about -0.05 per unit of risk. If you would invest 15,555 in Universal Display on September 19, 2024 and sell it today you would lose (160.00) from holding Universal Display or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. AGF Management Limited
Performance |
| Timeline |
| Universal Display |
| AGF Management |
Universal Display and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and AGF Management
The main advantage of trading using opposite Universal Display and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, AGF Management 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 AGF Management will offset losses from the drop in AGF Management's long position.| Universal Display vs. Applied Materials | Universal Display vs. Tokyo Electron Limited | Universal Display vs. Superior Plus Corp | Universal Display vs. SIVERS SEMICONDUCTORS AB |
| AGF Management vs. Entravision Communications | AGF Management vs. INSURANCE AUST GRP | AGF Management vs. Universal Display | AGF Management vs. SBI Insurance Group |
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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