Correlation Between Identiv and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both Identiv and ArcelorMittal 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 ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and ArcelorMittal, you can compare the effects of market volatilities on Identiv and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and ArcelorMittal.
Diversification Opportunities for Identiv and ArcelorMittal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Identiv and ArcelorMittal is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and ArcelorMittal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal has no effect on the direction of Identiv i.e., Identiv and ArcelorMittal go up and down completely randomly.
Pair Corralation between Identiv and ArcelorMittal
Assuming the 90 days trading horizon Identiv is expected to generate 1.74 times more return on investment than ArcelorMittal. However, Identiv is 1.74 times more volatile than ArcelorMittal. It trades about 0.0 of its potential returns per unit of risk. ArcelorMittal is currently generating about -0.01 per unit of risk. If you would invest 392.00 in Identiv on September 1, 2024 and sell it today you would lose (30.00) from holding Identiv or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Identiv vs. ArcelorMittal
Performance |
| Timeline |
| Identiv |
| ArcelorMittal |
Identiv and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and ArcelorMittal
The main advantage of trading using opposite Identiv and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| Identiv vs. ANTA SPORTS PRODUCT | Identiv vs. PLAYTIKA HOLDING DL 01 | Identiv vs. CNVISION MEDIA | Identiv vs. PARKEN Sport Entertainment |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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