Correlation Between Datalogic and Universal Display

Can any of the company-specific risk be diversified away by investing in both Datalogic 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 Datalogic and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Datalogic and Universal Display Corp, you can compare the effects of market volatilities on Datalogic 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 Datalogic with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datalogic and Universal Display.

Diversification Opportunities for Datalogic and Universal Display

0.86

Correlation Coefficient

Datalogic  Universal Display

Very poor diversification

The 3 months correlation between Datalogic and Universal is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Datalogic and Universal Display Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display Corp and Datalogic 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 Datalogic 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 Corp has no effect on the direction of Datalogic i.e., Datalogic and Universal Display go up and down completely randomly.

Pair Corralation between Datalogic and Universal Display

Assuming the 90 days trading horizon Datalogic is expected to generate 0.53 times more return on investment than Universal Display. However, Datalogic is 1.87 times less risky than Universal Display. It trades about -0.18 of its potential returns per unit of risk. Universal Display Corp is currently generating about -0.17 per unit of risk. If you would invest  594.00  in Datalogic on October 9, 2024 and sell it today you would lose (87.00) from holding Datalogic or give up 14.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.72%
Values	Daily Returns

Datalogic  vs.  Universal Display Corp

Datalogic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Datalogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Universal Display Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Universal Display Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Datalogic and Universal Display

The main advantage of trading using opposite Datalogic and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datalogic 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.

The idea behind Datalogic and Universal Display Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.