Correlation Between International Business and Identiv
Can any of the company-specific risk be diversified away by investing in both International Business 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 International Business and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and Identiv, you can compare the effects of market volatilities on International Business 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 International Business with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Identiv.
Diversification Opportunities for International Business and Identiv
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Identiv is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and International Business 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 International Business Machines 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 International Business i.e., International Business and Identiv go up and down completely randomly.
Pair Corralation between International Business and Identiv
Assuming the 90 days horizon International Business Machines is expected to generate 0.35 times more return on investment than Identiv. However, International Business Machines is 2.89 times less risky than Identiv. It trades about 0.09 of its potential returns per unit of risk. Identiv is currently generating about -0.08 per unit of risk. If you would invest 17,183 in International Business Machines on September 1, 2024 and sell it today you would earn a total of 4,317 from holding International Business Machines or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. Identiv
Performance |
| Timeline |
| International Business |
| Identiv |
International Business and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Identiv
The main advantage of trading using opposite International Business and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business 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.| International Business vs. AAC TECHNOLOGHLDGADR | International Business vs. Pentair plc | International Business vs. Lion Biotechnologies | International Business vs. Corsair Gaming |
| Identiv vs. ANTA SPORTS PRODUCT | Identiv vs. PLAYTIKA HOLDING DL 01 | Identiv vs. CNVISION MEDIA | Identiv vs. PARKEN Sport Entertainment |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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