Correlation Between Codex Acquisitions and Universal Display

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

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

Diversification Opportunities for Codex Acquisitions and Universal Display

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Correlation Coefficient

Codex Acquisitions  Universal Display

Pay attention - limited upside

The 3 months correlation between Codex and Universal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Codex Acquisitions PLC 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 Codex Acquisitions 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 Codex Acquisitions PLC 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 Codex Acquisitions i.e., Codex Acquisitions and Universal Display go up and down completely randomly.

Pair Corralation between Codex Acquisitions and Universal Display

Assuming the 90 days trading horizon Codex Acquisitions PLC is expected to under-perform the Universal Display. In addition to that, Codex Acquisitions is 1.7 times more volatile than Universal Display Corp. It trades about -0.05 of its total potential returns per unit of risk. Universal Display Corp is currently generating about 0.03 per unit of volatility. 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	Flat
Strength	Insignificant
Accuracy	84.71%
Values	Daily Returns

Codex Acquisitions PLC  vs.  Universal Display Corp

Codex Acquisitions PLC

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Codex Acquisitions PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Codex Acquisitions 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

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 unsteady 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 Codex Acquisitions and Universal Display

The main advantage of trading using opposite Codex Acquisitions and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codex Acquisitions 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 Codex Acquisitions PLC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.