Correlation Between Identiv and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Identiv and Procter Gamble 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 Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and The Procter Gamble, you can compare the effects of market volatilities on Identiv and Procter Gamble 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 Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Procter Gamble.
Diversification Opportunities for Identiv and Procter Gamble
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Identiv and Procter is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and The Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble 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 Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of Identiv i.e., Identiv and Procter Gamble go up and down completely randomly.
Pair Corralation between Identiv and Procter Gamble
Assuming the 90 days trading horizon Identiv is expected to under-perform the Procter Gamble. In addition to that, Identiv is 4.26 times more volatile than The Procter Gamble. It trades about -0.01 of its total potential returns per unit of risk. The Procter Gamble is currently generating about 0.05 per unit of volatility. If you would invest 13,505 in The Procter Gamble on August 27, 2024 and sell it today you would earn a total of 3,521 from holding The Procter Gamble or generate 26.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. The Procter Gamble
Performance |
| Timeline |
| Identiv |
| Procter Gamble |
Identiv and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Procter Gamble
The main advantage of trading using opposite Identiv and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.| Identiv vs. Superior Plus Corp | Identiv vs. Origin Agritech | Identiv vs. INTUITIVE SURGICAL | Identiv vs. Volkswagen AG |
| Procter Gamble vs. Superior Plus Corp | Procter Gamble vs. Origin Agritech | Procter Gamble vs. Identiv | Procter Gamble vs. INTUITIVE SURGICAL |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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