Correlation Between Identiv and Guangdong Investment
Can any of the company-specific risk be diversified away by investing in both Identiv and Guangdong Investment 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 Guangdong Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Guangdong Investment Limited, you can compare the effects of market volatilities on Identiv and Guangdong Investment 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 Guangdong Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Guangdong Investment.
Diversification Opportunities for Identiv and Guangdong Investment
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Identiv and Guangdong is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Guangdong Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Investment 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 Guangdong Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Investment has no effect on the direction of Identiv i.e., Identiv and Guangdong Investment go up and down completely randomly.
Pair Corralation between Identiv and Guangdong Investment
Assuming the 90 days trading horizon Identiv is expected to under-perform the Guangdong Investment. In addition to that, Identiv is 1.44 times more volatile than Guangdong Investment Limited. It trades about -0.1 of its total potential returns per unit of risk. Guangdong Investment Limited is currently generating about 0.11 per unit of volatility. If you would invest 68.00 in Guangdong Investment Limited on November 27, 2024 and sell it today you would earn a total of 3.00 from holding Guangdong Investment Limited or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. Guangdong Investment Limited
Performance |
| Timeline |
| Identiv |
| Guangdong Investment |
Identiv and Guangdong Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Guangdong Investment
The main advantage of trading using opposite Identiv and Guangdong Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Guangdong Investment 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 Guangdong Investment will offset losses from the drop in Guangdong Investment's long position.| Identiv vs. Discover Financial Services | Identiv vs. Sligro Food Group | Identiv vs. REVO INSURANCE SPA | Identiv vs. EBRO FOODS |
| Guangdong Investment vs. GREENX METALS LTD | Guangdong Investment vs. GLG LIFE TECH | Guangdong Investment vs. Addtech AB | Guangdong Investment vs. FIREWEED METALS P |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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