Correlation Between Chemed and Identiv
Can any of the company-specific risk be diversified away by investing in both Chemed 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 Chemed and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemed and Identiv, you can compare the effects of market volatilities on Chemed 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 Chemed with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemed and Identiv.
Diversification Opportunities for Chemed and Identiv
Modest diversification
The 3 months correlation between Chemed and Identiv is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Chemed and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Chemed 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 Chemed 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 Chemed i.e., Chemed and Identiv go up and down completely randomly.
Pair Corralation between Chemed and Identiv
Assuming the 90 days horizon Chemed is expected to generate 0.5 times more return on investment than Identiv. However, Chemed is 2.01 times less risky than Identiv. It trades about 0.13 of its potential returns per unit of risk. Identiv is currently generating about -0.08 per unit of risk. If you would invest 51,000 in Chemed on November 7, 2024 and sell it today you would earn a total of 2,500 from holding Chemed or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Chemed vs. Identiv
Performance |
| Timeline |
| Chemed |
| Identiv |
Chemed and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemed and Identiv
The main advantage of trading using opposite Chemed and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemed 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.| Chemed vs. United States Steel | Chemed vs. Marie Brizard Wine | Chemed vs. ARDAGH METAL PACDL 0001 | Chemed vs. KOBE STEEL LTD |
| Identiv vs. Hyatt Hotels | Identiv vs. DELTA AIR LINES | Identiv vs. Xenia Hotels Resorts | Identiv vs. NORWEGIAN AIR SHUT |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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