Correlation Between UNIVERSAL DISPLAY and Dow Jones
Can any of the company-specific risk be diversified away by investing in both UNIVERSAL DISPLAY and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIVERSAL DISPLAY and Dow Jones Industrial, you can compare the effects of market volatilities on UNIVERSAL DISPLAY and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL DISPLAY and Dow Jones.
Diversification Opportunities for UNIVERSAL DISPLAY and Dow Jones
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UNIVERSAL and Dow is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL DISPLAY and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of UNIVERSAL DISPLAY i.e., UNIVERSAL DISPLAY and Dow Jones go up and down completely randomly.
Pair Corralation between UNIVERSAL DISPLAY and Dow Jones
Assuming the 90 days trading horizon UNIVERSAL DISPLAY is expected to generate 3.03 times more return on investment than Dow Jones. However, UNIVERSAL DISPLAY is 3.03 times more volatile than Dow Jones Industrial. It trades about -0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.21 per unit of risk. If you would invest 15,046 in UNIVERSAL DISPLAY on October 12, 2024 and sell it today you would lose (401.00) from holding UNIVERSAL DISPLAY or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
UNIVERSAL DISPLAY vs. Dow Jones Industrial
Performance |
| Timeline |
UNIVERSAL DISPLAY and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
UNIVERSAL DISPLAY
Pair trading matchups for UNIVERSAL DISPLAY
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with UNIVERSAL DISPLAY and Dow Jones
The main advantage of trading using opposite UNIVERSAL DISPLAY and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVERSAL DISPLAY position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| UNIVERSAL DISPLAY vs. HK Electric Investments | UNIVERSAL DISPLAY vs. Gruppo Mutuionline SpA | UNIVERSAL DISPLAY vs. YATRA ONLINE DL 0001 | UNIVERSAL DISPLAY vs. MUTUIONLINE |
| Dow Jones vs. Toro | Dow Jones vs. Foot Locker | Dow Jones vs. Abercrombie Fitch | Dow Jones vs. 51Talk Online Education |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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