Correlation Between Universal Display and OneSavings Bank

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

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

Diversification Opportunities for Universal Display and OneSavings Bank

-0.44

Correlation Coefficient

Universal Display  OneSavings Bank

Very good diversification

The 3 months correlation between Universal and OneSavings is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display Corp and OneSavings Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSavings Bank PLC 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 Corp are associated (or correlated) with OneSavings Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSavings Bank PLC has no effect on the direction of Universal Display i.e., Universal Display and OneSavings Bank go up and down completely randomly.

Pair Corralation between Universal Display and OneSavings Bank

Assuming the 90 days trading horizon Universal Display Corp is expected to generate 1.01 times more return on investment than OneSavings Bank. However, Universal Display is 1.01 times more volatile than OneSavings Bank PLC. It trades about 0.05 of its potential returns per unit of risk. OneSavings Bank PLC is currently generating about 0.01 per unit of risk. If you would invest  10,475  in Universal Display Corp on September 23, 2024 and sell it today you would earn a total of  4,857  from holding Universal Display Corp or generate 46.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.03%
Values	Daily Returns

Universal Display Corp  vs.  OneSavings Bank PLC

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

OneSavings Bank PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OneSavings Bank PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, OneSavings Bank is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Universal Display and OneSavings Bank

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

The idea behind Universal Display Corp and OneSavings Bank PLC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .