Correlation Between Universal Display and Apple
Can any of the company-specific risk be diversified away by investing in both Universal Display and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and Apple Inc, you can compare the effects of market volatilities on Universal Display and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Apple.
Diversification Opportunities for Universal Display and Apple
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and Apple is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Universal Display i.e., Universal Display and Apple go up and down completely randomly.
Pair Corralation between Universal Display and Apple
Assuming the 90 days horizon Universal Display is expected to under-perform the Apple. In addition to that, Universal Display is 2.61 times more volatile than Apple Inc. It trades about -0.24 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.68 per unit of volatility. If you would invest 21,940 in Apple Inc on September 25, 2024 and sell it today you would earn a total of 2,445 from holding Apple Inc or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. Apple Inc
Performance |
| Timeline |
| Universal Display |
| Apple Inc |
Universal Display and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Apple
The main advantage of trading using opposite Universal Display and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Universal Display vs. ASML HOLDING NY | Universal Display vs. ASML Holding NV | Universal Display vs. Applied Materials | Universal Display vs. Tokyo Electron Limited |
| Apple vs. LG Display Co | Apple vs. Apollo Investment Corp | Apple vs. Universal Display | Apple vs. TRAVEL LEISURE DL 01 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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