Correlation Between Universal Display and Datalogic

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

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

Diversification Opportunities for Universal Display and Datalogic

0.86

Correlation Coefficient

Universal Display  Datalogic

Very poor diversification

The 3 months correlation between Universal and Datalogic is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display Corp and Datalogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datalogic 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 Corp are associated (or correlated) with Datalogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datalogic has no effect on the direction of Universal Display i.e., Universal Display and Datalogic go up and down completely randomly.

Pair Corralation between Universal Display and Datalogic

Assuming the 90 days trading horizon Universal Display Corp is expected to generate 0.97 times more return on investment than Datalogic. However, Universal Display Corp is 1.03 times less risky than Datalogic. It trades about 0.03 of its potential returns per unit of risk. Datalogic is currently generating about -0.03 per unit of risk. If you would invest  12,664  in Universal Display Corp on October 9, 2024 and sell it today you would earn a total of  3,078  from holding Universal Display Corp or generate 24.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	84.54%
Values	Daily Returns

Universal Display Corp  vs.  Datalogic

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.

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.

Pair Trading with Universal Display and Datalogic

The main advantage of trading using opposite Universal Display and Datalogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display position performs unexpectedly, Datalogic 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 Datalogic will offset losses from the drop in Datalogic's long position.

The idea behind Universal Display Corp and Datalogic 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.