Correlation Between Identiv and BHP Group
Can any of the company-specific risk be diversified away by investing in both Identiv and BHP 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 BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and BHP Group Limited, you can compare the effects of market volatilities on Identiv and BHP 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 BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and BHP Group.
Diversification Opportunities for Identiv and BHP Group
Weak diversification
The 3 months correlation between Identiv and BHP is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and BHP Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group Limited 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 BHP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group Limited has no effect on the direction of Identiv i.e., Identiv and BHP Group go up and down completely randomly.
Pair Corralation between Identiv and BHP Group
Assuming the 90 days trading horizon Identiv is expected to generate 2.02 times more return on investment than BHP Group. However, Identiv is 2.02 times more volatile than BHP Group Limited. It trades about 0.23 of its potential returns per unit of risk. BHP Group Limited is currently generating about -0.14 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 49.00 from holding Identiv or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. BHP Group Limited
Performance |
| Timeline |
| Identiv |
| BHP Group Limited |
Identiv and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and BHP Group
The main advantage of trading using opposite Identiv and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, BHP 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 BHP Group will offset losses from the drop in BHP Group's long position.| Identiv vs. Superior Plus Corp | Identiv vs. Origin Agritech | Identiv vs. INTUITIVE SURGICAL | Identiv vs. Volkswagen AG |
| BHP Group vs. Superior Plus Corp | BHP Group vs. NMI Holdings | BHP Group vs. Origin Agritech | BHP Group vs. SIVERS SEMICONDUCTORS AB |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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