Correlation Between CAIRN HOMES and Identiv
Can any of the company-specific risk be diversified away by investing in both CAIRN HOMES 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 CAIRN HOMES and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAIRN HOMES EO and Identiv, you can compare the effects of market volatilities on CAIRN HOMES 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 CAIRN HOMES with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIRN HOMES and Identiv.
Diversification Opportunities for CAIRN HOMES and Identiv
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CAIRN and Identiv is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CAIRN HOMES EO and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and CAIRN HOMES 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 CAIRN HOMES EO 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 CAIRN HOMES i.e., CAIRN HOMES and Identiv go up and down completely randomly.
Pair Corralation between CAIRN HOMES and Identiv
Assuming the 90 days horizon CAIRN HOMES EO is expected to generate 0.83 times more return on investment than Identiv. However, CAIRN HOMES EO is 1.2 times less risky than Identiv. It trades about 0.0 of its potential returns per unit of risk. Identiv is currently generating about -0.02 per unit of risk. If you would invest 231.00 in CAIRN HOMES EO on October 12, 2024 and sell it today you would lose (3.00) from holding CAIRN HOMES EO or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAIRN HOMES EO vs. Identiv
Performance |
| Timeline |
| CAIRN HOMES EO |
| Identiv |
CAIRN HOMES and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAIRN HOMES and Identiv
The main advantage of trading using opposite CAIRN HOMES and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIRN HOMES 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.| CAIRN HOMES vs. ADDUS HOMECARE | CAIRN HOMES vs. RELIANCE STEEL AL | CAIRN HOMES vs. Corporate Office Properties | CAIRN HOMES vs. Haverty Furniture Companies |
| Identiv vs. CAIRN HOMES EO | Identiv vs. Neinor Homes SA | Identiv vs. Taylor Morrison Home | Identiv vs. DFS Furniture PLC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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