Correlation Between Dairy Farm and Identiv
Can any of the company-specific risk be diversified away by investing in both Dairy Farm 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 Dairy Farm and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dairy Farm International and Identiv, you can compare the effects of market volatilities on Dairy Farm 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 Dairy Farm with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dairy Farm and Identiv.
Diversification Opportunities for Dairy Farm and Identiv
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dairy and Identiv is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dairy Farm International and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Dairy Farm 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 Dairy Farm International 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 Dairy Farm i.e., Dairy Farm and Identiv go up and down completely randomly.
Pair Corralation between Dairy Farm and Identiv
Assuming the 90 days trading horizon Dairy Farm International is expected to under-perform the Identiv. But the stock apears to be less risky and, when comparing its historical volatility, Dairy Farm International is 1.2 times less risky than Identiv. The stock trades about -0.05 of its potential returns per unit of risk. The Identiv is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 351.00 in Identiv on November 4, 2024 and sell it today you would lose (14.00) from holding Identiv or give up 3.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dairy Farm International vs. Identiv
Performance |
| Timeline |
| Dairy Farm International |
| Identiv |
Dairy Farm and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dairy Farm and Identiv
The main advantage of trading using opposite Dairy Farm and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dairy Farm 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.| Dairy Farm vs. NEWELL RUBBERMAID | Dairy Farm vs. GRUPO CARSO A1 | Dairy Farm vs. Cars Inc | Dairy Farm vs. AIR PRODCHEMICALS |
| Identiv vs. Chengdu PUTIAN Telecommunications | Identiv vs. T Mobile | Identiv vs. Iridium Communications | Identiv vs. GOODYEAR T RUBBER |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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