Correlation Between SBI Insurance and Universal Display

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

Diversification Opportunities for SBI Insurance and Universal Display

-0.71
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between SBI and Universal is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display and SBI Insurance 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 SBI Insurance Group 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 has no effect on the direction of SBI Insurance i.e., SBI Insurance and Universal Display go up and down completely randomly.

Pair Corralation between SBI Insurance and Universal Display

Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.6 times more return on investment than Universal Display. However, SBI Insurance Group is 1.67 times less risky than Universal Display. It trades about 0.12 of its potential returns per unit of risk. Universal Display is currently generating about -0.14 per unit of risk. If you would invest  570.00  in SBI Insurance Group on September 20, 2024 and sell it today you would earn a total of  60.00  from holding SBI Insurance Group or generate 10.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

SBI Insurance Group  vs.  Universal Display

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 051015202530
JavaScript chart by amCharts 3.21.15EEW UVD
       Timeline  
SBI Insurance Group 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SBI Insurance Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBI Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec5.45.65.866.26.4
Universal Display 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Universal Display has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec150160170180190

SBI Insurance and Universal Display Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.45-3.33-2.21-1.1-0.01861.182.373.574.77 0.050.100.15
JavaScript chart by amCharts 3.21.15EEW UVD
       Returns  

Pair Trading with SBI Insurance and Universal Display

The main advantage of trading using opposite SBI Insurance and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance 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 SBI Insurance Group and Universal Display 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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