Correlation Between Linde PLC and Identiv
Can any of the company-specific risk be diversified away by investing in both Linde PLC and Identiv 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 Linde PLC and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Linde PLC and Identiv, you can compare the effects of market volatilities on Linde PLC and Identiv 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 Linde PLC with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linde PLC and Identiv.
Diversification Opportunities for Linde PLC and Identiv
Significant diversification
The 3 months correlation between Linde and Identiv is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Linde PLC and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Linde PLC 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 Linde PLC are associated (or correlated) with Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Linde PLC i.e., Linde PLC and Identiv go up and down completely randomly.
Pair Corralation between Linde PLC and Identiv
Assuming the 90 days trading horizon Linde PLC is expected to generate 0.24 times more return on investment than Identiv. However, Linde PLC is 4.1 times less risky than Identiv. It trades about 0.08 of its potential returns per unit of risk. Identiv is currently generating about -0.01 per unit of risk. If you would invest 29,477 in Linde PLC on November 9, 2024 and sell it today you would earn a total of 14,263 from holding Linde PLC or generate 48.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Linde PLC vs. Identiv
Performance |
| Timeline |
| Linde PLC |
| Identiv |
Linde PLC and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linde PLC and Identiv
The main advantage of trading using opposite Linde PLC and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linde PLC position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| Linde PLC vs. Chuangs China Investments | Linde PLC vs. Vienna Insurance Group | Linde PLC vs. Direct Line Insurance | Linde PLC vs. SEI INVESTMENTS |
| Identiv vs. Aristocrat Leisure Limited | Identiv vs. Columbia Sportswear | Identiv vs. COLUMBIA SPORTSWEAR | Identiv vs. LG Display Co |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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