Correlation Between Identiv and NN Group
Can any of the company-specific risk be diversified away by investing in both Identiv and NN Group 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 Identiv and NN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and NN Group NV, you can compare the effects of market volatilities on Identiv and NN Group 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 Identiv with a short position of NN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and NN Group.
Diversification Opportunities for Identiv and NN Group
Weak diversification
The 3 months correlation between Identiv and 2NN is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV and Identiv 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 Identiv are associated (or correlated) with NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of Identiv i.e., Identiv and NN Group go up and down completely randomly.
Pair Corralation between Identiv and NN Group
Assuming the 90 days trading horizon Identiv is expected to generate 2.87 times more return on investment than NN Group. However, Identiv is 2.87 times more volatile than NN Group NV. It trades about 0.24 of its potential returns per unit of risk. NN Group NV is currently generating about -0.18 per unit of risk. If you would invest 322.00 in Identiv on August 29, 2024 and sell it today you would earn a total of 52.00 from holding Identiv or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Identiv vs. NN Group NV
Performance |
| Timeline |
| Identiv |
| NN Group NV |
Identiv and NN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and NN Group
The main advantage of trading using opposite Identiv and NN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, NN Group 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 NN Group will offset losses from the drop in NN Group's long position.| Identiv vs. NIPPON STEEL SPADR | Identiv vs. GFL ENVIRONM | Identiv vs. RELIANCE STEEL AL | Identiv vs. United States Steel |
| NN Group vs. Goodyear Tire Rubber | NN Group vs. Verizon Communications | NN Group vs. NAKED WINES PLC | NN Group vs. Martin Marietta Materials |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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