Correlation Between Universal Display and SilverBox Corp

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

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

Diversification Opportunities for Universal Display and SilverBox Corp

-0.52

Correlation Coefficient

Universal Display  SilverBox Corp

Excellent diversification

The 3 months correlation between Universal and SilverBox is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and SilverBox Corp III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverBox Corp III 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 SilverBox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverBox Corp III has no effect on the direction of Universal Display i.e., Universal Display and SilverBox Corp go up and down completely randomly.

Pair Corralation between Universal Display and SilverBox Corp

Given the investment horizon of 90 days Universal Display is expected to under-perform the SilverBox Corp. In addition to that, Universal Display is 1.08 times more volatile than SilverBox Corp III. It trades about -0.22 of its total potential returns per unit of risk. SilverBox Corp III is currently generating about 0.03 per unit of volatility. If you would invest  1,070  in SilverBox Corp III on September 28, 2024 and sell it today you would earn a total of  14.00  from holding SilverBox Corp III or generate 1.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	42.86%
Values	Daily Returns

Universal Display  vs.  SilverBox Corp III

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 technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

SilverBox Corp III

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days SilverBox Corp III has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SilverBox Corp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Universal Display and SilverBox Corp

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

The idea behind Universal Display and SilverBox Corp III 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.