Correlation Between Universal Display and MOWI ASA
Can any of the company-specific risk be diversified away by investing in both Universal Display and MOWI ASA 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 MOWI ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and MOWI ASA SPADR, you can compare the effects of market volatilities on Universal Display and MOWI ASA 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 MOWI ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and MOWI ASA.
Diversification Opportunities for Universal Display and MOWI ASA
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and MOWI is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and MOWI ASA SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOWI ASA SPADR 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 MOWI ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOWI ASA SPADR has no effect on the direction of Universal Display i.e., Universal Display and MOWI ASA go up and down completely randomly.
Pair Corralation between Universal Display and MOWI ASA
Assuming the 90 days horizon Universal Display is expected to generate 1.41 times more return on investment than MOWI ASA. However, Universal Display is 1.41 times more volatile than MOWI ASA SPADR. It trades about 0.04 of its potential returns per unit of risk. MOWI ASA SPADR is currently generating about 0.03 per unit of risk. If you would invest 10,158 in Universal Display on September 12, 2024 and sell it today you would earn a total of 4,742 from holding Universal Display or generate 46.68% 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. MOWI ASA SPADR
Performance |
| Timeline |
| Universal Display |
| MOWI ASA SPADR |
Universal Display and MOWI ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and MOWI ASA
The main advantage of trading using opposite Universal Display and MOWI ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, MOWI ASA 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 MOWI ASA will offset losses from the drop in MOWI ASA'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 |
| MOWI ASA vs. Taylor Morrison Home | MOWI ASA vs. Universal Display | MOWI ASA vs. Verizon Communications | MOWI ASA vs. Spirent Communications plc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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