Correlation Between Identiv and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Identiv and Macquarie 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 Macquarie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Macquarie Group Limited, you can compare the effects of market volatilities on Identiv and Macquarie 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 Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Macquarie Group.
Diversification Opportunities for Identiv and Macquarie Group
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Identiv and Macquarie is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Macquarie Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group 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 Macquarie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Identiv i.e., Identiv and Macquarie Group go up and down completely randomly.
Pair Corralation between Identiv and Macquarie Group
Assuming the 90 days trading horizon Identiv is expected to generate 2.01 times more return on investment than Macquarie Group. However, Identiv is 2.01 times more volatile than Macquarie Group Limited. It trades about 0.11 of its potential returns per unit of risk. Macquarie Group Limited is currently generating about 0.01 per unit of risk. If you would invest 337.00 in Identiv on August 25, 2024 and sell it today you would earn a total of 23.00 from holding Identiv or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. Macquarie Group Limited
Performance |
| Timeline |
| Identiv |
| Macquarie Group |
Identiv and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Macquarie Group
The main advantage of trading using opposite Identiv and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Macquarie 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 Macquarie Group will offset losses from the drop in Macquarie Group's long position.| Identiv vs. COVIVIO HOTELS INH | Identiv vs. Alaska Air Group | Identiv vs. Hyatt Hotels | Identiv vs. LAir Liquide SA |
| Macquarie Group vs. Gruppo Mutuionline SpA | Macquarie Group vs. The Hanover Insurance | Macquarie Group vs. Insurance Australia Group | Macquarie Group vs. MUTUIONLINE |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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