Correlation Between Identiv and Compagnie
Can any of the company-specific risk be diversified away by investing in both Identiv and Compagnie 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 Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Compagnie de Saint Gobain, you can compare the effects of market volatilities on Identiv and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Compagnie.
Diversification Opportunities for Identiv and Compagnie
Very poor diversification
The 3 months correlation between Identiv and Compagnie is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of Identiv i.e., Identiv and Compagnie go up and down completely randomly.
Pair Corralation between Identiv and Compagnie
Assuming the 90 days trading horizon Identiv is expected to generate 2.12 times more return on investment than Compagnie. However, Identiv is 2.12 times more volatile than Compagnie de Saint Gobain. It trades about 0.24 of its potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.15 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 52.00 from holding Identiv or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Identiv vs. Compagnie de Saint Gobain
Performance |
| Timeline |
| Identiv |
| Compagnie de Saint |
Identiv and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Compagnie
The main advantage of trading using opposite Identiv and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.| Identiv vs. NIPPON STEEL SPADR | Identiv vs. GFL ENVIRONM | Identiv vs. RELIANCE STEEL AL | Identiv vs. United States Steel |
| Compagnie vs. National Bank Holdings | Compagnie vs. SOFTBANK P ADR | Compagnie vs. Iridium Communications | Compagnie vs. GRIFFIN MINING LTD |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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