Correlation Between UNIVERSAL DISPLAY and SEALED AIR

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

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

Diversification Opportunities for UNIVERSAL DISPLAY and SEALED AIR

0.8

Correlation Coefficient

UNIVERSAL DISPLAY  SEALED AIR

Very poor diversification

The 3 months correlation between UNIVERSAL and SEALED is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL DISPLAY and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of UNIVERSAL DISPLAY i.e., UNIVERSAL DISPLAY and SEALED AIR go up and down completely randomly.

Pair Corralation between UNIVERSAL DISPLAY and SEALED AIR

Assuming the 90 days trading horizon UNIVERSAL DISPLAY is expected to generate 1.35 times more return on investment than SEALED AIR. However, UNIVERSAL DISPLAY is 1.35 times more volatile than SEALED AIR . It trades about 0.12 of its potential returns per unit of risk. SEALED AIR is currently generating about 0.09 per unit of risk. If you would invest  10,833  in UNIVERSAL DISPLAY on April 25, 2025 and sell it today you would earn a total of  2,017  from holding UNIVERSAL DISPLAY or generate 18.62% return on investment over 90 days.

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

UNIVERSAL DISPLAY  vs.  SEALED AIR

UNIVERSAL DISPLAY

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UNIVERSAL DISPLAY are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, UNIVERSAL DISPLAY unveiled solid returns over the last few months and may actually be approaching a breakup point.

SEALED AIR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SEALED AIR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SEALED AIR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with UNIVERSAL DISPLAY and SEALED AIR

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

The idea behind UNIVERSAL DISPLAY and SEALED AIR 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.