Correlation Between Identiv and Suncorp Group
Can any of the company-specific risk be diversified away by investing in both Identiv and Suncorp Group 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 Suncorp Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Suncorp Group Limited, you can compare the effects of market volatilities on Identiv and Suncorp Group 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 Suncorp Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Suncorp Group.
Diversification Opportunities for Identiv and Suncorp Group
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Identiv and Suncorp is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Suncorp Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group Limited 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 Suncorp Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncorp Group Limited has no effect on the direction of Identiv i.e., Identiv and Suncorp Group go up and down completely randomly.
Pair Corralation between Identiv and Suncorp Group
Assuming the 90 days trading horizon Identiv is expected to generate 1.14 times less return on investment than Suncorp Group. In addition to that, Identiv is 1.66 times more volatile than Suncorp Group Limited. It trades about 0.16 of its total potential returns per unit of risk. Suncorp Group Limited is currently generating about 0.31 per unit of volatility. If you would invest 1,050 in Suncorp Group Limited on September 3, 2024 and sell it today you would earn a total of 140.00 from holding Suncorp Group Limited or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. Suncorp Group Limited
Performance |
| Timeline |
| Identiv |
| Suncorp Group Limited |
Identiv and Suncorp Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Suncorp Group
The main advantage of trading using opposite Identiv and Suncorp Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Suncorp Group 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 Suncorp Group will offset losses from the drop in Suncorp Group's long position.| Identiv vs. Hitachi Construction Machinery | Identiv vs. Sumitomo Mitsui Construction | Identiv vs. Marie Brizard Wine | Identiv vs. HYDROFARM HLD GRP |
| Suncorp Group vs. SHIP HEALTHCARE HLDGINC | Suncorp Group vs. Sabra Health Care | Suncorp Group vs. Cardinal Health | Suncorp Group vs. Australian Agricultural |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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