Correlation Between Identiv and International Business
Can any of the company-specific risk be diversified away by investing in both Identiv and International Business 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 International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and International Business Machines, you can compare the effects of market volatilities on Identiv and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and International Business.
Diversification Opportunities for Identiv and International Business
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Identiv and International is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Identiv i.e., Identiv and International Business go up and down completely randomly.
Pair Corralation between Identiv and International Business
Assuming the 90 days trading horizon Identiv is expected to under-perform the International Business. In addition to that, Identiv is 2.89 times more volatile than International Business Machines. It trades about -0.08 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.09 per unit of volatility. If you would invest 17,183 in International Business Machines on September 1, 2024 and sell it today you would earn a total of 4,317 from holding International Business Machines or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. International Business Machine
Performance |
| Timeline |
| Identiv |
| International Business |
Identiv and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and International Business
The main advantage of trading using opposite Identiv and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Identiv vs. ANTA SPORTS PRODUCT | Identiv vs. PLAYTIKA HOLDING DL 01 | Identiv vs. CNVISION MEDIA | Identiv vs. PARKEN Sport Entertainment |
| International Business vs. AAC TECHNOLOGHLDGADR | International Business vs. Pentair plc | International Business vs. Lion Biotechnologies | International Business vs. Corsair Gaming |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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