Correlation Between Identiv and UFP Industries
Can any of the company-specific risk be diversified away by investing in both Identiv and UFP Industries 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 UFP Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and UFP Industries, you can compare the effects of market volatilities on Identiv and UFP Industries 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 UFP Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and UFP Industries.
Diversification Opportunities for Identiv and UFP Industries
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Identiv and UFP is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and UFP Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UFP Industries 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 UFP Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UFP Industries has no effect on the direction of Identiv i.e., Identiv and UFP Industries go up and down completely randomly.
Pair Corralation between Identiv and UFP Industries
Assuming the 90 days trading horizon Identiv is expected to generate 1.18 times more return on investment than UFP Industries. However, Identiv is 1.18 times more volatile than UFP Industries. It trades about 0.15 of its potential returns per unit of risk. UFP Industries is currently generating about 0.16 per unit of risk. If you would invest 331.00 in Identiv on August 30, 2024 and sell it today you would earn a total of 32.00 from holding Identiv or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Identiv vs. UFP Industries
Performance |
| Timeline |
| Identiv |
| UFP Industries |
Identiv and UFP Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and UFP Industries
The main advantage of trading using opposite Identiv and UFP Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, UFP Industries 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 UFP Industries will offset losses from the drop in UFP Industries' long position.| Identiv vs. Corsair Gaming | Identiv vs. SENECA FOODS A | Identiv vs. Tyson Foods | Identiv vs. MYFAIR GOLD P |
| UFP Industries vs. Svenska Cellulosa Aktiebolaget | UFP Industries vs. Superior Plus Corp | UFP Industries vs. NMI Holdings | UFP Industries vs. SIVERS SEMICONDUCTORS AB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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