Correlation Between Arbe Robotics and Universal Display

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

By analyzing existing cross correlation between Arbe Robotics Ltd and Universal Display, you can compare the effects of market volatilities on Arbe Robotics and Universal Display 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 Arbe Robotics with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbe Robotics and Universal Display.

Diversification Opportunities for Arbe Robotics and Universal Display

0.06

Correlation Coefficient

Arbe Robotics  Universal Display

Significant diversification

The 3 months correlation between Arbe and Universal is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Arbe Robotics Ltd and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display and Arbe Robotics 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 Arbe Robotics Ltd are associated (or correlated) with Universal Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Display has no effect on the direction of Arbe Robotics i.e., Arbe Robotics and Universal Display go up and down completely randomly.

Pair Corralation between Arbe Robotics and Universal Display

Assuming the 90 days horizon Arbe Robotics Ltd is expected to generate 5.96 times more return on investment than Universal Display. However, Arbe Robotics is 5.96 times more volatile than Universal Display. It trades about 0.08 of its potential returns per unit of risk. Universal Display is currently generating about 0.04 per unit of risk. If you would invest  20.00  in Arbe Robotics Ltd on May 6, 2025 and sell it today you would earn a total of  3.48  from holding Arbe Robotics Ltd or generate 17.4% return on investment over 90 days.

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

Arbe Robotics Ltd  vs.  Universal Display

Arbe Robotics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arbe Robotics Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Arbe Robotics showed solid returns over the last few months and may actually be approaching a breakup point.

Universal Display

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Display are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Universal Display is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Arbe Robotics and Universal Display

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

The idea behind Arbe Robotics Ltd and Universal Display 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.