Correlation Between Plexus Corp and Identiv
Can any of the company-specific risk be diversified away by investing in both Plexus Corp 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 Plexus Corp and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Identiv, you can compare the effects of market volatilities on Plexus Corp 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 Plexus Corp with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Identiv.
Diversification Opportunities for Plexus Corp and Identiv
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Plexus and Identiv is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Plexus Corp 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 Plexus Corp 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 Plexus Corp i.e., Plexus Corp and Identiv go up and down completely randomly.
Pair Corralation between Plexus Corp and Identiv
Assuming the 90 days horizon Plexus Corp is expected to generate 0.51 times more return on investment than Identiv. However, Plexus Corp is 1.96 times less risky than Identiv. It trades about 0.11 of its potential returns per unit of risk. Identiv is currently generating about -0.05 per unit of risk. If you would invest 9,550 in Plexus Corp on September 3, 2024 and sell it today you would earn a total of 5,650 from holding Plexus Corp or generate 59.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. Identiv
Performance |
| Timeline |
| Plexus Corp |
| Identiv |
Plexus Corp and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Identiv
The main advantage of trading using opposite Plexus Corp and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp 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.| Plexus Corp vs. FORWARD AIR P | Plexus Corp vs. Constellation Software | Plexus Corp vs. SEALED AIR | Plexus Corp vs. Corsair Gaming |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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