Correlation Between Universal Display and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both Universal Display and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and SINGAPORE AIRLINES, you can compare the effects of market volatilities on Universal Display and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and SINGAPORE AIRLINES.
Diversification Opportunities for Universal Display and SINGAPORE AIRLINES
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and SINGAPORE is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE AIRLINES has no effect on the direction of Universal Display i.e., Universal Display and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between Universal Display and SINGAPORE AIRLINES
Assuming the 90 days horizon Universal Display is expected to under-perform the SINGAPORE AIRLINES. In addition to that, Universal Display is 1.97 times more volatile than SINGAPORE AIRLINES. It trades about -0.26 of its total potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.14 per unit of volatility. If you would invest 426.00 in SINGAPORE AIRLINES on September 1, 2024 and sell it today you would earn a total of 14.00 from holding SINGAPORE AIRLINES or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| Universal Display |
| SINGAPORE AIRLINES |
Universal Display and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and SINGAPORE AIRLINES
The main advantage of trading using opposite Universal Display and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, SINGAPORE AIRLINES 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 SINGAPORE AIRLINES will offset losses from the drop in SINGAPORE AIRLINES's long position.| Universal Display vs. Superior Plus Corp | Universal Display vs. NMI Holdings | Universal Display vs. Origin Agritech | Universal Display vs. SIVERS SEMICONDUCTORS AB |
| SINGAPORE AIRLINES vs. MAGNUM MINING EXP | SINGAPORE AIRLINES vs. FIREWEED METALS P | SINGAPORE AIRLINES vs. Alfa Financial Software | SINGAPORE AIRLINES vs. Coeur Mining |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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