Correlation Between SHOPRITE HDGS and Identiv
Can any of the company-specific risk be diversified away by investing in both SHOPRITE HDGS 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 SHOPRITE HDGS and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHOPRITE HDGS ADR and Identiv, you can compare the effects of market volatilities on SHOPRITE HDGS 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 SHOPRITE HDGS with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHOPRITE HDGS and Identiv.
Diversification Opportunities for SHOPRITE HDGS and Identiv
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SHOPRITE and Identiv is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SHOPRITE HDGS ADR and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and SHOPRITE HDGS 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 SHOPRITE HDGS ADR 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 SHOPRITE HDGS i.e., SHOPRITE HDGS and Identiv go up and down completely randomly.
Pair Corralation between SHOPRITE HDGS and Identiv
Assuming the 90 days trading horizon SHOPRITE HDGS ADR is expected to generate 0.52 times more return on investment than Identiv. However, SHOPRITE HDGS ADR is 1.92 times less risky than Identiv. It trades about -0.01 of its potential returns per unit of risk. Identiv is currently generating about -0.04 per unit of risk. If you would invest 1,450 in SHOPRITE HDGS ADR on November 4, 2024 and sell it today you would lose (10.00) from holding SHOPRITE HDGS ADR or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHOPRITE HDGS ADR vs. Identiv
Performance |
| Timeline |
| SHOPRITE HDGS ADR |
| Identiv |
SHOPRITE HDGS and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHOPRITE HDGS and Identiv
The main advantage of trading using opposite SHOPRITE HDGS and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHOPRITE HDGS 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.| SHOPRITE HDGS vs. United Natural Foods | SHOPRITE HDGS vs. Transport International Holdings | SHOPRITE HDGS vs. Yuexiu Transport Infrastructure | SHOPRITE HDGS vs. MTY Food Group |
| 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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