Correlation Between Identiv and Danone SA
Can any of the company-specific risk be diversified away by investing in both Identiv and Danone SA 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 Danone SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Danone SA, you can compare the effects of market volatilities on Identiv and Danone SA 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 Danone SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Danone SA.
Diversification Opportunities for Identiv and Danone SA
Pay attention - limited upside
The 3 months correlation between Identiv and Danone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Danone SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danone SA 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 Danone SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danone SA has no effect on the direction of Identiv i.e., Identiv and Danone SA go up and down completely randomly.
Pair Corralation between Identiv and Danone SA
Assuming the 90 days trading horizon Identiv is expected to under-perform the Danone SA. In addition to that, Identiv is 3.99 times more volatile than Danone SA. It trades about -0.01 of its total potential returns per unit of risk. Danone SA is currently generating about 0.07 per unit of volatility. If you would invest 4,624 in Danone SA on September 3, 2024 and sell it today you would earn a total of 1,826 from holding Danone SA or generate 39.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. Danone SA
Performance |
| Timeline |
| Identiv |
| Danone SA |
Identiv and Danone SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Danone SA
The main advantage of trading using opposite Identiv and Danone SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Danone SA 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 Danone SA will offset losses from the drop in Danone SA's long position.| Identiv vs. Hitachi Construction Machinery | Identiv vs. Sumitomo Mitsui Construction | Identiv vs. Marie Brizard Wine | Identiv vs. HYDROFARM HLD GRP |
| Danone SA vs. RETAIL FOOD GROUP | Danone SA vs. CarsalesCom | Danone SA vs. National Retail Properties | Danone SA vs. Vastned Retail NV |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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