Correlation Between Universal Display and PC Connection
Can any of the company-specific risk be diversified away by investing in both Universal Display and PC Connection 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 PC Connection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and PC Connection, you can compare the effects of market volatilities on Universal Display and PC Connection 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 PC Connection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and PC Connection.
Diversification Opportunities for Universal Display and PC Connection
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Universal and PCC is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and PC Connection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PC Connection 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 PC Connection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PC Connection has no effect on the direction of Universal Display i.e., Universal Display and PC Connection go up and down completely randomly.
Pair Corralation between Universal Display and PC Connection
Assuming the 90 days horizon Universal Display is expected to generate 1.27 times more return on investment than PC Connection. However, Universal Display is 1.27 times more volatile than PC Connection. It trades about 0.05 of its potential returns per unit of risk. PC Connection is currently generating about 0.05 per unit of risk. If you would invest 10,581 in Universal Display on September 5, 2024 and sell it today you would earn a total of 5,119 from holding Universal Display or generate 48.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. PC Connection
Performance |
| Timeline |
| Universal Display |
| PC Connection |
Universal Display and PC Connection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and PC Connection
The main advantage of trading using opposite Universal Display and PC Connection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, PC Connection 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 PC Connection will offset losses from the drop in PC Connection's long position.| Universal Display vs. ASML HOLDING NY | Universal Display vs. ASML Holding NV | Universal Display vs. ASML Holding NV | Universal Display vs. Tokyo Electron Limited |
| PC Connection vs. LG Display Co | PC Connection vs. Universal Display | PC Connection vs. COLUMBIA SPORTSWEAR | PC Connection vs. MAROC TELECOM |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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