Correlation Between UNIVERSAL DISPLAY and SOLSTAD OFFSHORE

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

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

Diversification Opportunities for UNIVERSAL DISPLAY and SOLSTAD OFFSHORE

0.03

Correlation Coefficient

UNIVERSAL DISPLAY  SOLSTAD OFFSHORE

Significant diversification

The 3 months correlation between UNIVERSAL and SOLSTAD is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL DISPLAY and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLSTAD OFFSHORE has no effect on the direction of UNIVERSAL DISPLAY i.e., UNIVERSAL DISPLAY and SOLSTAD OFFSHORE go up and down completely randomly.

Pair Corralation between UNIVERSAL DISPLAY and SOLSTAD OFFSHORE

Assuming the 90 days trading horizon UNIVERSAL DISPLAY is expected to generate 1.01 times more return on investment than SOLSTAD OFFSHORE. However, UNIVERSAL DISPLAY is 1.01 times more volatile than SOLSTAD OFFSHORE NK. It trades about -0.03 of its potential returns per unit of risk. SOLSTAD OFFSHORE NK is currently generating about -0.03 per unit of risk. If you would invest  14,436  in UNIVERSAL DISPLAY on December 22, 2024 and sell it today you would lose (686.00) from holding UNIVERSAL DISPLAY or give up 4.75% of portfolio value over 90 days.

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

UNIVERSAL DISPLAY  vs.  SOLSTAD OFFSHORE NK

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

SOLSTAD OFFSHORE

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOLSTAD OFFSHORE NK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SOLSTAD OFFSHORE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with UNIVERSAL DISPLAY and SOLSTAD OFFSHORE

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

The idea behind UNIVERSAL DISPLAY and SOLSTAD OFFSHORE NK 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.