Correlation Between Identiv and Varta AG
Can any of the company-specific risk be diversified away by investing in both Identiv and Varta AG 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 Varta AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Varta AG, you can compare the effects of market volatilities on Identiv and Varta AG 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 Varta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Varta AG.
Diversification Opportunities for Identiv and Varta AG
Weak diversification
The 3 months correlation between Identiv and Varta is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Varta AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varta AG 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 Varta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varta AG has no effect on the direction of Identiv i.e., Identiv and Varta AG go up and down completely randomly.
Pair Corralation between Identiv and Varta AG
Assuming the 90 days trading horizon Identiv is expected to under-perform the Varta AG. But the stock apears to be less risky and, when comparing its historical volatility, Identiv is 3.01 times less risky than Varta AG. The stock trades about -0.04 of its potential returns per unit of risk. The Varta AG is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,058 in Varta AG on September 3, 2024 and sell it today you would lose (1,867) from holding Varta AG or give up 90.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. Varta AG
Performance |
| Timeline |
| Identiv |
| Varta AG |
Identiv and Varta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Varta AG
The main advantage of trading using opposite Identiv and Varta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Varta AG 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 Varta AG will offset losses from the drop in Varta AG's long position.| Identiv vs. Hitachi Construction Machinery | Identiv vs. Sumitomo Mitsui Construction | Identiv vs. Marie Brizard Wine | Identiv vs. HYDROFARM HLD GRP |
| Varta AG vs. Nucletron Electronic Aktiengesellschaft | Varta AG vs. 24SEVENOFFICE GROUP AB | Varta AG vs. Methode Electronics | Varta AG vs. Richardson Electronics |
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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