Correlation Between Universal Display and Accsys Technologies

Can any of the company-specific risk be diversified away by investing in both Universal Display and Accsys Technologies 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 Accsys Technologies 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 Accsys Technologies PLC, you can compare the effects of market volatilities on Universal Display and Accsys Technologies 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 Accsys Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Accsys Technologies.

Diversification Opportunities for Universal Display and Accsys Technologies

0.83

Correlation Coefficient

Universal Display  Accsys Technologies

Very poor diversification

The 3 months correlation between Universal and Accsys is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display Corp and Accsys Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accsys Technologies 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 Corp are associated (or correlated) with Accsys Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accsys Technologies PLC has no effect on the direction of Universal Display i.e., Universal Display and Accsys Technologies go up and down completely randomly.

Pair Corralation between Universal Display and Accsys Technologies

Assuming the 90 days trading horizon Universal Display Corp is expected to under-perform the Accsys Technologies. In addition to that, Universal Display is 1.38 times more volatile than Accsys Technologies PLC. It trades about -0.25 of its total potential returns per unit of risk. Accsys Technologies PLC is currently generating about -0.02 per unit of volatility. If you would invest  4,545  in Accsys Technologies PLC on October 15, 2024 and sell it today you would lose (45.00) from holding Accsys Technologies PLC or give up 0.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	88.89%
Values	Daily Returns

Universal Display Corp  vs.  Accsys Technologies PLC

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.

Accsys Technologies PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accsys Technologies PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Universal Display and Accsys Technologies

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

The idea behind Universal Display Corp and Accsys Technologies PLC 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.