Correlation Between BP Plc and Identiv
Can any of the company-specific risk be diversified away by investing in both BP Plc 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 BP Plc and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP plc and Identiv, you can compare the effects of market volatilities on BP Plc 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 BP Plc with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Plc and Identiv.
Diversification Opportunities for BP Plc and Identiv
Very good diversification
The 3 months correlation between BPE5 and Identiv is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BP plc and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and BP Plc 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 BP plc 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 BP Plc i.e., BP Plc and Identiv go up and down completely randomly.
Pair Corralation between BP Plc and Identiv
Assuming the 90 days trading horizon BP plc is expected to generate 0.36 times more return on investment than Identiv. However, BP plc is 2.78 times less risky than Identiv. It trades about 0.0 of its potential returns per unit of risk. Identiv is currently generating about -0.01 per unit of risk. If you would invest 481.00 in BP plc on August 29, 2024 and sell it today you would lose (21.00) from holding BP plc or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
BP plc vs. Identiv
Performance |
| Timeline |
| BP plc |
| Identiv |
BP Plc and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Plc and Identiv
The main advantage of trading using opposite BP Plc and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Plc 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.| BP Plc vs. Microchip Technology Incorporated | BP Plc vs. SCOTT TECHNOLOGY | BP Plc vs. DXC Technology Co | BP Plc vs. Mitsui Chemicals |
| Identiv vs. NIPPON STEEL SPADR | Identiv vs. GFL ENVIRONM | Identiv vs. RELIANCE STEEL AL | Identiv vs. United States Steel |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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