Correlation Between Highlight Communications and Identiv
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Identiv, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Identiv.
Diversification Opportunities for Highlight Communications and Identiv
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Highlight and Identiv is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and Identiv go up and down completely randomly.
Pair Corralation between Highlight Communications and Identiv
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the Identiv. In addition to that, Highlight Communications is 1.18 times more volatile than Identiv. It trades about -0.03 of its total potential returns per unit of risk. Identiv is currently generating about 0.0 per unit of volatility. If you would invest 377.00 in Identiv on October 30, 2024 and sell it today you would lose (31.00) from holding Identiv or give up 8.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. Identiv
Performance |
| Timeline |
| Highlight Communications |
| Identiv |
Highlight Communications and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Identiv
The main advantage of trading using opposite Highlight Communications and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. Keck Seng Investments | Highlight Communications vs. Gladstone Investment | Highlight Communications vs. CENTURIA OFFICE REIT | Highlight Communications vs. NURAN WIRELESS INC |
| Identiv vs. Geely Automobile Holdings | Identiv vs. Aegean Airlines SA | Identiv vs. SOUTHWEST AIRLINES | Identiv vs. SINGAPORE AIRLINES |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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