Correlation Between NYSE Composite and Universal Display
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Universal Display 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 NYSE Composite and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Universal Display, you can compare the effects of market volatilities on NYSE Composite and Universal Display 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 NYSE Composite with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Universal Display.
Diversification Opportunities for NYSE Composite and Universal Display
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Universal is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display and NYSE Composite 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 NYSE Composite are associated (or correlated) with Universal Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Display has no effect on the direction of NYSE Composite i.e., NYSE Composite and Universal Display go up and down completely randomly.
Pair Corralation between NYSE Composite and Universal Display
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.43 times more return on investment than Universal Display. However, NYSE Composite is 2.31 times less risky than Universal Display. It trades about -0.18 of its potential returns per unit of risk. Universal Display is currently generating about -0.15 per unit of risk. If you would invest 1,821,619 in NYSE Composite on January 30, 2024 and sell it today you would lose (45,292) from holding NYSE Composite or give up 2.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Universal Display
Performance |
Timeline |
NYSE Composite and Universal Display Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Universal Display
Pair trading matchups for Universal Display
Pair Trading with NYSE Composite and Universal Display
The main advantage of trading using opposite NYSE Composite and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Universal Display 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 Universal Display will offset losses from the drop in Universal Display's long position.NYSE Composite vs. Dennys Corp | NYSE Composite vs. Asbury Automotive Group | NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Biglari Holdings |
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.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |