Correlation Between Universal Display and Office Properties
Can any of the company-specific risk be diversified away by investing in both Universal Display and Office Properties 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 Office Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and Office Properties Income, you can compare the effects of market volatilities on Universal Display and Office Properties 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 Office Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Office Properties.
Diversification Opportunities for Universal Display and Office Properties
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and Office is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and Office Properties Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Office Properties Income 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 Office Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Office Properties Income has no effect on the direction of Universal Display i.e., Universal Display and Office Properties go up and down completely randomly.
Pair Corralation between Universal Display and Office Properties
Assuming the 90 days horizon Universal Display is expected to generate 0.36 times more return on investment than Office Properties. However, Universal Display is 2.8 times less risky than Office Properties. It trades about -0.25 of its potential returns per unit of risk. Office Properties Income is currently generating about -0.16 per unit of risk. If you would invest 18,620 in Universal Display on August 25, 2024 and sell it today you would lose (3,145) from holding Universal Display or give up 16.89% 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. Office Properties Income
Performance |
| Timeline |
| Universal Display |
| Office Properties Income |
Universal Display and Office Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Office Properties
The main advantage of trading using opposite Universal Display and Office Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Office Properties 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 Office Properties will offset losses from the drop in Office Properties' long position.| Universal Display vs. ASML HOLDING NY | Universal Display vs. Applied Materials | Universal Display vs. Lam Research | Universal Display vs. Superior Plus Corp |
| Office Properties vs. CDN IMPERIAL BANK | Office Properties vs. Quaker Chemical | Office Properties vs. Sanyo Chemical Industries | Office Properties vs. TIANDE CHEMICAL |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |