Correlation Between Alibaba Health and Identiv
Can any of the company-specific risk be diversified away by investing in both Alibaba Health 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 Alibaba Health and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alibaba Health Information and Identiv, you can compare the effects of market volatilities on Alibaba Health 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 Alibaba Health with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Health and Identiv.
Diversification Opportunities for Alibaba Health and Identiv
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alibaba and Identiv is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Health Information and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Alibaba Health 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 Alibaba Health Information 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 Alibaba Health i.e., Alibaba Health and Identiv go up and down completely randomly.
Pair Corralation between Alibaba Health and Identiv
Assuming the 90 days horizon Alibaba Health Information is expected to under-perform the Identiv. But the stock apears to be less risky and, when comparing its historical volatility, Alibaba Health Information is 1.25 times less risky than Identiv. The stock trades about -0.09 of its potential returns per unit of risk. The Identiv is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 354.00 in Identiv on October 25, 2024 and sell it today you would earn a total of 2.00 from holding Identiv or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Health Information vs. Identiv
Performance |
| Timeline |
| Alibaba Health Infor |
| Identiv |
Alibaba Health and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Health and Identiv
The main advantage of trading using opposite Alibaba Health and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Health 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.| Alibaba Health vs. Walgreens Boots Alliance | Alibaba Health vs. Superior Plus Corp | Alibaba Health vs. Origin Agritech | Alibaba Health vs. Identiv |
| Identiv vs. Perseus Mining Limited | Identiv vs. AGRICULTBK HADR25 YC | Identiv vs. Dairy Farm International | Identiv vs. Sterling Construction |
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 Stocks Directory module to find actively traded stocks across global markets.
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