Correlation Between BHP Group and Identiv
Can any of the company-specific risk be diversified away by investing in both BHP Group and Identiv 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 BHP Group and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHP Group Limited and Identiv, you can compare the effects of market volatilities on BHP Group and Identiv 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 BHP Group with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Identiv.
Diversification Opportunities for BHP Group and Identiv
Weak diversification
The 3 months correlation between BHP and Identiv is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and BHP Group 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 BHP Group Limited are associated (or correlated) with Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of BHP Group i.e., BHP Group and Identiv go up and down completely randomly.
Pair Corralation between BHP Group and Identiv
Assuming the 90 days trading horizon BHP Group Limited is expected to under-perform the Identiv. But the stock apears to be less risky and, when comparing its historical volatility, BHP Group Limited is 2.02 times less risky than Identiv. The stock trades about -0.14 of its potential returns per unit of risk. The Identiv is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 322.00 in Identiv on August 29, 2024 and sell it today you would earn a total of 49.00 from holding Identiv or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHP Group Limited vs. Identiv
Performance |
| Timeline |
| BHP Group Limited |
| Identiv |
BHP Group and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Identiv
The main advantage of trading using opposite BHP Group and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| BHP Group vs. Superior Plus Corp | BHP Group vs. NMI Holdings | BHP Group vs. Origin Agritech | BHP Group vs. SIVERS SEMICONDUCTORS AB |
| Identiv vs. Superior Plus Corp | Identiv vs. Origin Agritech | Identiv vs. INTUITIVE SURGICAL | Identiv vs. Volkswagen AG |
Check out your portfolio center.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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