Correlation Between SOLSTAD OFFSHORE and UNIVERSAL DISPLAY

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

By analyzing existing cross correlation between SOLSTAD OFFSHORE NK and UNIVERSAL DISPLAY, you can compare the effects of market volatilities on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE with a short position of UNIVERSAL DISPLAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and UNIVERSAL DISPLAY.

Diversification Opportunities for SOLSTAD OFFSHORE and UNIVERSAL DISPLAY

-0.69

Correlation Coefficient

SOLSTAD OFFSHORE  UNIVERSAL DISPLAY

Excellent diversification

The 3 months correlation between SOLSTAD and UNIVERSAL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and UNIVERSAL DISPLAY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVERSAL DISPLAY and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE NK 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 SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and UNIVERSAL DISPLAY go up and down completely randomly.

Pair Corralation between SOLSTAD OFFSHORE and UNIVERSAL DISPLAY

Assuming the 90 days horizon SOLSTAD OFFSHORE is expected to generate 1.26 times less return on investment than UNIVERSAL DISPLAY. In addition to that, SOLSTAD OFFSHORE is 1.79 times more volatile than UNIVERSAL DISPLAY. It trades about 0.01 of its total potential returns per unit of risk. UNIVERSAL DISPLAY is currently generating about 0.03 per unit of volatility. If you would invest  11,574  in UNIVERSAL DISPLAY on October 11, 2024 and sell it today you would earn a total of  3,171  from holding UNIVERSAL DISPLAY or generate 27.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SOLSTAD OFFSHORE NK  vs.  UNIVERSAL DISPLAY

SOLSTAD OFFSHORE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SOLSTAD OFFSHORE NK are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SOLSTAD OFFSHORE reported solid returns over the last few months and may actually be approaching a breakup point.

UNIVERSAL DISPLAY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNIVERSAL DISPLAY 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 fundamental 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 SOLSTAD OFFSHORE and UNIVERSAL DISPLAY

The main advantage of trading using opposite SOLSTAD OFFSHORE and UNIVERSAL DISPLAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE NK 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.