Correlation Between Identiv and FREY EO
Can any of the company-specific risk be diversified away by investing in both Identiv and FREY EO 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 FREY EO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and FREY EO 250, you can compare the effects of market volatilities on Identiv and FREY EO 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 FREY EO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and FREY EO.
Diversification Opportunities for Identiv and FREY EO
Significant diversification
The 3 months correlation between Identiv and FREY is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and FREY EO 250 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREY EO 250 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 FREY EO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREY EO 250 has no effect on the direction of Identiv i.e., Identiv and FREY EO go up and down completely randomly.
Pair Corralation between Identiv and FREY EO
Assuming the 90 days trading horizon Identiv is expected to generate 3.95 times more return on investment than FREY EO. However, Identiv is 3.95 times more volatile than FREY EO 250. It trades about 0.1 of its potential returns per unit of risk. FREY EO 250 is currently generating about -0.25 per unit of risk. If you would invest 364.00 in Identiv on September 12, 2024 and sell it today you would earn a total of 25.00 from holding Identiv or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. FREY EO 250
Performance |
| Timeline |
| Identiv |
| FREY EO 250 |
Identiv and FREY EO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and FREY EO
The main advantage of trading using opposite Identiv and FREY EO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, FREY EO 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 FREY EO will offset losses from the drop in FREY EO's long position.| Identiv vs. MARKET VECTR RETAIL | Identiv vs. SALESFORCE INC CDR | Identiv vs. British American Tobacco | Identiv vs. QURATE RETAIL INC |
| FREY EO vs. VIAPLAY GROUP AB | FREY EO vs. CARSALESCOM | FREY EO vs. USWE SPORTS AB | FREY EO vs. Canon Marketing Japan |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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