Correlation Between Identiv and SIEMENS ENERGY
Can any of the company-specific risk be diversified away by investing in both Identiv and SIEMENS ENERGY 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 SIEMENS ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and SIEMENS ENERGY AG, you can compare the effects of market volatilities on Identiv and SIEMENS ENERGY 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 SIEMENS ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and SIEMENS ENERGY.
Diversification Opportunities for Identiv and SIEMENS ENERGY
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Identiv and SIEMENS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and SIEMENS ENERGY AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS ENERGY AG 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 SIEMENS ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS ENERGY AG has no effect on the direction of Identiv i.e., Identiv and SIEMENS ENERGY go up and down completely randomly.
Pair Corralation between Identiv and SIEMENS ENERGY
Assuming the 90 days trading horizon Identiv is expected to generate 2.44 times less return on investment than SIEMENS ENERGY. In addition to that, Identiv is 1.03 times more volatile than SIEMENS ENERGY AG. It trades about 0.14 of its total potential returns per unit of risk. SIEMENS ENERGY AG is currently generating about 0.36 per unit of volatility. If you would invest 3,320 in SIEMENS ENERGY AG on August 25, 2024 and sell it today you would earn a total of 1,560 from holding SIEMENS ENERGY AG or generate 46.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. SIEMENS ENERGY AG
Performance |
| Timeline |
| Identiv |
| SIEMENS ENERGY AG |
Identiv and SIEMENS ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and SIEMENS ENERGY
The main advantage of trading using opposite Identiv and SIEMENS ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, SIEMENS ENERGY 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 SIEMENS ENERGY will offset losses from the drop in SIEMENS ENERGY's long position.| Identiv vs. COVIVIO HOTELS INH | Identiv vs. Alaska Air Group | Identiv vs. Hyatt Hotels | Identiv vs. LAir Liquide SA |
| SIEMENS ENERGY vs. Datang International Power | SIEMENS ENERGY vs. Superior Plus Corp | SIEMENS ENERGY vs. Origin Agritech | SIEMENS ENERGY vs. Identiv |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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