Correlation Between Churchill Downs and Identiv
Can any of the company-specific risk be diversified away by investing in both Churchill Downs 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 Churchill Downs and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Churchill Downs Incorporated and Identiv, you can compare the effects of market volatilities on Churchill Downs 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 Churchill Downs with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Churchill Downs and Identiv.
Diversification Opportunities for Churchill Downs and Identiv
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Churchill and Identiv is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Churchill Downs Incorporated and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Churchill Downs 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 Churchill Downs Incorporated 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 Churchill Downs i.e., Churchill Downs and Identiv go up and down completely randomly.
Pair Corralation between Churchill Downs and Identiv
Assuming the 90 days horizon Churchill Downs Incorporated is expected to generate 0.44 times more return on investment than Identiv. However, Churchill Downs Incorporated is 2.3 times less risky than Identiv. It trades about 0.03 of its potential returns per unit of risk. Identiv is currently generating about -0.01 per unit of risk. If you would invest 10,462 in Churchill Downs Incorporated on September 3, 2024 and sell it today you would earn a total of 2,738 from holding Churchill Downs Incorporated or generate 26.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Churchill Downs Incorporated vs. Identiv
Performance |
| Timeline |
| Churchill Downs |
| Identiv |
Churchill Downs and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Churchill Downs and Identiv
The main advantage of trading using opposite Churchill Downs and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Churchill Downs 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.| Churchill Downs vs. Lion One Metals | Churchill Downs vs. Eastman Chemical | Churchill Downs vs. FIREWEED METALS P | Churchill Downs vs. China BlueChemical |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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