Correlation Between Identiv and United States
Can any of the company-specific risk be diversified away by investing in both Identiv and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and United States Steel, you can compare the effects of market volatilities on Identiv and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and United States.
Diversification Opportunities for Identiv and United States
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Identiv and United is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Identiv i.e., Identiv and United States go up and down completely randomly.
Pair Corralation between Identiv and United States
Assuming the 90 days trading horizon Identiv is expected to under-perform the United States. In addition to that, Identiv is 1.66 times more volatile than United States Steel. It trades about -0.08 of its total potential returns per unit of risk. United States Steel is currently generating about -0.01 per unit of volatility. If you would invest 4,363 in United States Steel on September 1, 2024 and sell it today you would lose (573.00) from holding United States Steel or give up 13.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. United States Steel
Performance |
| Timeline |
| Identiv |
| United States Steel |
Identiv and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and United States
The main advantage of trading using opposite Identiv and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Identiv vs. ANTA SPORTS PRODUCT | Identiv vs. PLAYTIKA HOLDING DL 01 | Identiv vs. CNVISION MEDIA | Identiv vs. PARKEN Sport Entertainment |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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