Correlation Between Universal Electronics and Energous
Can any of the company-specific risk be diversified away by investing in both Universal Electronics and Energous 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 Electronics and Energous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Electronics and Energous, you can compare the effects of market volatilities on Universal Electronics and Energous 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 Electronics with a short position of Energous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Electronics and Energous.
Diversification Opportunities for Universal Electronics and Energous
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and Energous is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Universal Electronics and Energous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energous and Universal Electronics 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 Electronics are associated (or correlated) with Energous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energous has no effect on the direction of Universal Electronics i.e., Universal Electronics and Energous go up and down completely randomly.
Pair Corralation between Universal Electronics and Energous
Given the investment horizon of 90 days Universal Electronics is expected to generate 0.42 times more return on investment than Energous. However, Universal Electronics is 2.37 times less risky than Energous. It trades about -0.07 of its potential returns per unit of risk. Energous is currently generating about -0.19 per unit of risk. If you would invest 1,016 in Universal Electronics on January 25, 2024 and sell it today you would lose (36.00) from holding Universal Electronics or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Electronics vs. Energous
Performance |
| Timeline |
| Universal Electronics |
| Energous |
Universal Electronics and Energous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Electronics and Energous
The main advantage of trading using opposite Universal Electronics and Energous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Electronics position performs unexpectedly, Energous 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 Energous will offset losses from the drop in Energous' long position.| Universal Electronics vs. LG Display Co | Universal Electronics vs. Turtle Beach Corp | Universal Electronics vs. Vuzix Corp Cmn | Universal Electronics vs. Sony Corp |
| Energous vs. AERWINS Technologies | Energous vs. Cepton Inc | Energous vs. SaverOne 2014 Ltd | Energous vs. Mind Technology Pref |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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