Correlation Between UFP Industries and Identiv
Can any of the company-specific risk be diversified away by investing in both UFP Industries 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 UFP Industries and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UFP Industries and Identiv, you can compare the effects of market volatilities on UFP Industries 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 UFP Industries with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of UFP Industries and Identiv.
Diversification Opportunities for UFP Industries and Identiv
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UFP and Identiv is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding UFP Industries and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and UFP Industries 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 UFP Industries 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 UFP Industries i.e., UFP Industries and Identiv go up and down completely randomly.
Pair Corralation between UFP Industries and Identiv
Assuming the 90 days horizon UFP Industries is expected to generate 0.48 times more return on investment than Identiv. However, UFP Industries is 2.08 times less risky than Identiv. It trades about 0.06 of its potential returns per unit of risk. Identiv is currently generating about -0.03 per unit of risk. If you would invest 8,901 in UFP Industries on September 12, 2024 and sell it today you would earn a total of 3,579 from holding UFP Industries or generate 40.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UFP Industries vs. Identiv
Performance |
| Timeline |
| UFP Industries |
| Identiv |
UFP Industries and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UFP Industries and Identiv
The main advantage of trading using opposite UFP Industries and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UFP Industries 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.| UFP Industries vs. Superior Plus Corp | UFP Industries vs. SIVERS SEMICONDUCTORS AB | UFP Industries vs. NorAm Drilling AS | UFP Industries vs. Norsk Hydro ASA |
| Identiv vs. MARKET VECTR RETAIL | Identiv vs. SALESFORCE INC CDR | Identiv vs. British American Tobacco | Identiv vs. QURATE RETAIL INC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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