Correlation Between USU Software and Identiv
Can any of the company-specific risk be diversified away by investing in both USU Software 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 USU Software and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USU Software AG and Identiv, you can compare the effects of market volatilities on USU Software 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 USU Software with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of USU Software and Identiv.
Diversification Opportunities for USU Software and Identiv
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USU and Identiv is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding USU Software AG and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and USU Software 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 USU Software AG 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 USU Software i.e., USU Software and Identiv go up and down completely randomly.
Pair Corralation between USU Software and Identiv
Assuming the 90 days trading horizon USU Software AG is expected to generate 0.52 times more return on investment than Identiv. However, USU Software AG is 1.93 times less risky than Identiv. It trades about 0.0 of its potential returns per unit of risk. Identiv is currently generating about -0.02 per unit of risk. If you would invest 2,492 in USU Software AG on September 4, 2024 and sell it today you would lose (282.00) from holding USU Software AG or give up 11.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
USU Software AG vs. Identiv
Performance |
| Timeline |
| USU Software AG |
| Identiv |
USU Software and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USU Software and Identiv
The main advantage of trading using opposite USU Software and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USU Software 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.| USU Software vs. FUJITSU LTD ADR | USU Software vs. Superior Plus Corp | USU Software vs. NMI Holdings | USU Software vs. Origin Agritech |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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