Correlation Between UNIVERSAL DISPLAY and Crown Energy

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

By analyzing existing cross correlation between UNIVERSAL DISPLAY and Crown Energy AB, you can compare the effects of market volatilities on UNIVERSAL DISPLAY and Crown Energy 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 Crown Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL DISPLAY and Crown Energy.

Diversification Opportunities for UNIVERSAL DISPLAY and Crown Energy

0.39

Correlation Coefficient

UNIVERSAL DISPLAY  Crown Energy

Weak diversification

The 3 months correlation between UNIVERSAL and Crown is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL DISPLAY and Crown Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Energy AB 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 are associated (or correlated) with Crown Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Energy AB has no effect on the direction of UNIVERSAL DISPLAY i.e., UNIVERSAL DISPLAY and Crown Energy go up and down completely randomly.

Pair Corralation between UNIVERSAL DISPLAY and Crown Energy

Assuming the 90 days trading horizon UNIVERSAL DISPLAY is expected to under-perform the Crown Energy. But the stock apears to be less risky and, when comparing its historical volatility, UNIVERSAL DISPLAY is 10.34 times less risky than Crown Energy. The stock trades about -0.03 of its potential returns per unit of risk. The Crown Energy AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3.35  in Crown Energy AB on December 21, 2024 and sell it today you would earn a total of  1.00  from holding Crown Energy AB or generate 29.85% return on investment over 90 days.

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

UNIVERSAL DISPLAY  vs.  Crown Energy AB

UNIVERSAL DISPLAY

Risk-Adjusted Performance

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 comparatively stable fundamental indicators, UNIVERSAL DISPLAY is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Crown Energy AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Crown Energy AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Crown Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNIVERSAL DISPLAY and Crown Energy

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

The idea behind UNIVERSAL DISPLAY and Crown Energy AB 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.