Correlation Between SIMCERE PHARMAC and Identiv
Can any of the company-specific risk be diversified away by investing in both SIMCERE PHARMAC 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 SIMCERE PHARMAC and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMCERE PHARMAC GRP and Identiv, you can compare the effects of market volatilities on SIMCERE PHARMAC 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 SIMCERE PHARMAC with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMCERE PHARMAC and Identiv.
Diversification Opportunities for SIMCERE PHARMAC and Identiv
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SIMCERE and Identiv is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SIMCERE PHARMAC GRP and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and SIMCERE PHARMAC 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 SIMCERE PHARMAC GRP 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 SIMCERE PHARMAC i.e., SIMCERE PHARMAC and Identiv go up and down completely randomly.
Pair Corralation between SIMCERE PHARMAC and Identiv
Assuming the 90 days horizon SIMCERE PHARMAC GRP is expected to generate 0.81 times more return on investment than Identiv. However, SIMCERE PHARMAC GRP is 1.24 times less risky than Identiv. It trades about 0.02 of its potential returns per unit of risk. Identiv is currently generating about -0.01 per unit of risk. If you would invest 75.00 in SIMCERE PHARMAC GRP on September 3, 2024 and sell it today you would earn a total of 9.00 from holding SIMCERE PHARMAC GRP or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMCERE PHARMAC GRP vs. Identiv
Performance |
| Timeline |
| SIMCERE PHARMAC GRP |
| Identiv |
SIMCERE PHARMAC and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMCERE PHARMAC and Identiv
The main advantage of trading using opposite SIMCERE PHARMAC and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMCERE PHARMAC 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.| SIMCERE PHARMAC vs. Merck KGaA | SIMCERE PHARMAC vs. CanSino Biologics | SIMCERE PHARMAC vs. Superior Plus Corp | SIMCERE PHARMAC vs. NMI Holdings |
| Identiv vs. Hitachi Construction Machinery | Identiv vs. Sumitomo Mitsui Construction | Identiv vs. Marie Brizard Wine | Identiv vs. HYDROFARM HLD GRP |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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