Correlation Between UNIVERSAL DISPLAY and Unilever PLC
Can any of the company-specific risk be diversified away by investing in both UNIVERSAL DISPLAY and Unilever PLC 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 Unilever PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIVERSAL DISPLAY and Unilever PLC, you can compare the effects of market volatilities on UNIVERSAL DISPLAY and Unilever PLC 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 Unilever PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL DISPLAY and Unilever PLC.
Diversification Opportunities for UNIVERSAL DISPLAY and Unilever PLC
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UNIVERSAL and Unilever is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL DISPLAY and Unilever PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever PLC 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 Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC has no effect on the direction of UNIVERSAL DISPLAY i.e., UNIVERSAL DISPLAY and Unilever PLC go up and down completely randomly.
Pair Corralation between UNIVERSAL DISPLAY and Unilever PLC
Assuming the 90 days trading horizon UNIVERSAL DISPLAY is expected to under-perform the Unilever PLC. In addition to that, UNIVERSAL DISPLAY is 1.57 times more volatile than Unilever PLC. It trades about -0.16 of its total potential returns per unit of risk. Unilever PLC is currently generating about -0.02 per unit of volatility. If you would invest 5,700 in Unilever PLC on November 1, 2024 and sell it today you would lose (200.00) from holding Unilever PLC or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIVERSAL DISPLAY vs. Unilever PLC
Performance |
| Timeline |
| UNIVERSAL DISPLAY |
| Unilever PLC |
UNIVERSAL DISPLAY and Unilever PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIVERSAL DISPLAY and Unilever PLC
The main advantage of trading using opposite UNIVERSAL DISPLAY and Unilever PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVERSAL DISPLAY position performs unexpectedly, Unilever PLC 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 Unilever PLC will offset losses from the drop in Unilever PLC's long position.| UNIVERSAL DISPLAY vs. CHINA TONTINE WINES | UNIVERSAL DISPLAY vs. DeVry Education Group | UNIVERSAL DISPLAY vs. Firan Technology Group | UNIVERSAL DISPLAY vs. EMBARK EDUCATION LTD |
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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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