Correlation Between Identiv and Shoprite Holdings
Can any of the company-specific risk be diversified away by investing in both Identiv and Shoprite Holdings 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 Shoprite Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Shoprite Holdings Limited, you can compare the effects of market volatilities on Identiv and Shoprite Holdings 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 Shoprite Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Shoprite Holdings.
Diversification Opportunities for Identiv and Shoprite Holdings
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Identiv and Shoprite is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Shoprite Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoprite Holdings 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 Shoprite Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoprite Holdings has no effect on the direction of Identiv i.e., Identiv and Shoprite Holdings go up and down completely randomly.
Pair Corralation between Identiv and Shoprite Holdings
Assuming the 90 days trading horizon Identiv is expected to generate 2.1 times more return on investment than Shoprite Holdings. However, Identiv is 2.1 times more volatile than Shoprite Holdings Limited. It trades about 0.19 of its potential returns per unit of risk. Shoprite Holdings Limited is currently generating about -0.01 per unit of risk. If you would invest 320.00 in Identiv on September 1, 2024 and sell it today you would earn a total of 42.00 from holding Identiv or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Identiv vs. Shoprite Holdings Limited
Performance |
| Timeline |
| Identiv |
| Shoprite Holdings |
Identiv and Shoprite Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Shoprite Holdings
The main advantage of trading using opposite Identiv and Shoprite Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Shoprite Holdings 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 Shoprite Holdings will offset losses from the drop in Shoprite Holdings' long position.| Identiv vs. ANTA SPORTS PRODUCT | Identiv vs. PLAYTIKA HOLDING DL 01 | Identiv vs. CNVISION MEDIA | Identiv vs. PARKEN Sport Entertainment |
| Shoprite Holdings vs. AIR PRODCHEMICALS | Shoprite Holdings vs. PTT Global Chemical | Shoprite Holdings vs. Silicon Motion Technology | Shoprite Holdings vs. BRIT AMER TOBACCO |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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