Correlation Between Naturhouse Health and Universal Display

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Naturhouse Health 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 Naturhouse Health and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naturhouse Health SA and Universal Display Corp, you can compare the effects of market volatilities on Naturhouse Health 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 Naturhouse Health with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturhouse Health and Universal Display.

Diversification Opportunities for Naturhouse Health and Universal Display

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Naturhouse and Universal is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Naturhouse Health SA 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 Naturhouse Health 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 Naturhouse Health SA 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 Naturhouse Health i.e., Naturhouse Health and Universal Display go up and down completely randomly.

Pair Corralation between Naturhouse Health and Universal Display

Assuming the 90 days trading horizon Naturhouse Health SA is expected to generate 0.44 times more return on investment than Universal Display. However, Naturhouse Health SA is 2.27 times less risky than Universal Display. It trades about -0.08 of its potential returns per unit of risk. Universal Display Corp is currently generating about -0.05 per unit of risk. If you would invest  181.00  in Naturhouse Health SA on August 31, 2024 and sell it today you would lose (12.00) from holding Naturhouse Health SA or give up 6.63% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.44%
ValuesDaily Returns

Naturhouse Health SA  vs.  Universal Display Corp

 Performance 
       Timeline  
Naturhouse Health 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Naturhouse Health SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Naturhouse Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Universal Display Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Naturhouse Health and Universal Display Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Naturhouse Health and Universal Display

The main advantage of trading using opposite Naturhouse Health and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturhouse Health 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 Naturhouse Health SA 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.
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

Other Complementary Tools

Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes