Correlation Between Universal Display and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Universal Display and MeVis Medical 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 MeVis Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and MeVis Medical Solutions, you can compare the effects of market volatilities on Universal Display and MeVis Medical 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 MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and MeVis Medical.
Diversification Opportunities for Universal Display and MeVis Medical
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and MeVis is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions 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 MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Universal Display i.e., Universal Display and MeVis Medical go up and down completely randomly.
Pair Corralation between Universal Display and MeVis Medical
Assuming the 90 days horizon Universal Display is expected to under-perform the MeVis Medical. In addition to that, Universal Display is 2.26 times more volatile than MeVis Medical Solutions. It trades about -0.09 of its total potential returns per unit of risk. MeVis Medical Solutions is currently generating about 0.16 per unit of volatility. If you would invest 2,360 in MeVis Medical Solutions on September 5, 2024 and sell it today you would earn a total of 80.00 from holding MeVis Medical Solutions or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. MeVis Medical Solutions
Performance |
| Timeline |
| Universal Display |
| MeVis Medical Solutions |
Universal Display and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and MeVis Medical
The main advantage of trading using opposite Universal Display and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, MeVis Medical 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| Universal Display vs. ASML Holding NV | Universal Display vs. Tokyo Electron Limited | Universal Display vs. Enphase Energy | Universal Display vs. ASM International NV |
| MeVis Medical vs. Universal Display | MeVis Medical vs. Collins Foods Limited | MeVis Medical vs. Playtech plc | MeVis Medical vs. Columbia Sportswear |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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