Correlation Between Universal Display and SpaceandPeople Plc

Can any of the company-specific risk be diversified away by investing in both Universal Display and SpaceandPeople Plc 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 SpaceandPeople Plc 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 SpaceandPeople Plc, you can compare the effects of market volatilities on Universal Display and SpaceandPeople Plc 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 SpaceandPeople Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and SpaceandPeople Plc.

Diversification Opportunities for Universal Display and SpaceandPeople Plc

0.12

Correlation Coefficient

Universal Display  SpaceandPeople Plc

Average diversification

The 3 months correlation between Universal and SpaceandPeople is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display Corp and SpaceandPeople Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpaceandPeople 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 SpaceandPeople Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpaceandPeople Plc has no effect on the direction of Universal Display i.e., Universal Display and SpaceandPeople Plc go up and down completely randomly.

Pair Corralation between Universal Display and SpaceandPeople Plc

Assuming the 90 days trading horizon Universal Display is expected to generate 1.05 times less return on investment than SpaceandPeople Plc. But when comparing it to its historical volatility, Universal Display Corp is 1.29 times less risky than SpaceandPeople Plc. It trades about 0.16 of its potential returns per unit of risk. SpaceandPeople Plc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  9,750  in SpaceandPeople Plc on April 20, 2025 and sell it today you would earn a total of  3,250  from holding SpaceandPeople Plc or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Universal Display Corp  vs.  SpaceandPeople Plc

Universal Display Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Display Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Universal Display unveiled solid returns over the last few months and may actually be approaching a breakup point.

SpaceandPeople Plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SpaceandPeople Plc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SpaceandPeople Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Universal Display and SpaceandPeople Plc

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

The idea behind Universal Display Corp and SpaceandPeople 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.