Correlation Between Universal Display and DICKER DATA
Can any of the company-specific risk be diversified away by investing in both Universal Display and DICKER DATA 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 DICKER DATA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and DICKER DATA LTD, you can compare the effects of market volatilities on Universal Display and DICKER DATA 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 DICKER DATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and DICKER DATA.
Diversification Opportunities for Universal Display and DICKER DATA
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and DICKER is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and DICKER DATA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKER DATA LTD 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 DICKER DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKER DATA LTD has no effect on the direction of Universal Display i.e., Universal Display and DICKER DATA go up and down completely randomly.
Pair Corralation between Universal Display and DICKER DATA
Assuming the 90 days horizon Universal Display is expected to generate 1.1 times more return on investment than DICKER DATA. However, Universal Display is 1.1 times more volatile than DICKER DATA LTD. It trades about -0.01 of its potential returns per unit of risk. DICKER DATA LTD is currently generating about -0.04 per unit of risk. If you would invest 17,279 in Universal Display on September 14, 2024 and sell it today you would lose (2,559) from holding Universal Display or give up 14.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. DICKER DATA LTD
Performance |
| Timeline |
| Universal Display |
| DICKER DATA LTD |
Universal Display and DICKER DATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and DICKER DATA
The main advantage of trading using opposite Universal Display and DICKER DATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, DICKER DATA 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 DICKER DATA will offset losses from the drop in DICKER DATA'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 |
| DICKER DATA vs. Arrow Electronics | DICKER DATA vs. KAGA EL LTD | DICKER DATA vs. Wayside Technology 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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