Correlation Between Identiv and Lam Research
Can any of the company-specific risk be diversified away by investing in both Identiv and Lam Research 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 Lam Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Lam Research, you can compare the effects of market volatilities on Identiv and Lam Research 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 Lam Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Lam Research.
Diversification Opportunities for Identiv and Lam Research
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Identiv and Lam is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Lam Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lam Research 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 Lam Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lam Research has no effect on the direction of Identiv i.e., Identiv and Lam Research go up and down completely randomly.
Pair Corralation between Identiv and Lam Research
Assuming the 90 days trading horizon Identiv is expected to generate 1.5 times more return on investment than Lam Research. However, Identiv is 1.5 times more volatile than Lam Research. It trades about 0.23 of its potential returns per unit of risk. Lam Research is currently generating about 0.0 per unit of risk. If you would invest 322.00 in Identiv on August 28, 2024 and sell it today you would earn a total of 49.00 from holding Identiv or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Identiv vs. Lam Research
Performance |
| Timeline |
| Identiv |
| Lam Research |
Identiv and Lam Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Lam Research
The main advantage of trading using opposite Identiv and Lam Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Lam Research 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 Lam Research will offset losses from the drop in Lam Research's long position.| Identiv vs. Superior Plus Corp | Identiv vs. Origin Agritech | Identiv vs. INTUITIVE SURGICAL | Identiv vs. Volkswagen AG |
| Lam Research vs. Transportadora de Gas | Lam Research vs. Texas Roadhouse | Lam Research vs. Broadcom | Lam Research vs. Harmony Gold Mining |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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