Correlation Between DFS Furniture and Identiv
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Identiv, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Identiv.
Diversification Opportunities for DFS Furniture and Identiv
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DFS and Identiv is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and DFS Furniture 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 DFS Furniture 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 DFS Furniture i.e., DFS Furniture and Identiv go up and down completely randomly.
Pair Corralation between DFS Furniture and Identiv
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.79 times more return on investment than Identiv. However, DFS Furniture PLC is 1.27 times less risky than Identiv. It trades about 0.04 of its potential returns per unit of risk. Identiv is currently generating about -0.02 per unit of risk. If you would invest 151.00 in DFS Furniture PLC on October 12, 2024 and sell it today you would earn a total of 4.00 from holding DFS Furniture PLC or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
DFS Furniture PLC vs. Identiv
Performance |
| Timeline |
| DFS Furniture PLC |
| Identiv |
DFS Furniture and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Identiv
The main advantage of trading using opposite DFS Furniture and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. FIRST SAVINGS FINL | DFS Furniture vs. New Residential Investment | DFS Furniture vs. WisdomTree Investments | DFS Furniture vs. Teradata Corp |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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