Correlation Between United States and Identiv
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Identiv, you can compare the effects of market volatilities on United States 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 United States with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Identiv.
Diversification Opportunities for United States and Identiv
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Identiv is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and United States 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 United States Steel 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 United States i.e., United States and Identiv go up and down completely randomly.
Pair Corralation between United States and Identiv
Assuming the 90 days trading horizon United States is expected to generate 2.2 times less return on investment than Identiv. But when comparing it to its historical volatility, United States Steel is 1.03 times less risky than Identiv. It trades about 0.09 of its potential returns per unit of risk. Identiv is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 320.00 in Identiv on September 1, 2024 and sell it today you would earn a total of 42.00 from holding Identiv or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Identiv
Performance |
| Timeline |
| United States Steel |
| Identiv |
United States and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Identiv
The main advantage of trading using opposite United States and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. PT Indofood Sukses | United States vs. NIPPON MEAT PACKERS | United States vs. Food Life Companies | United States vs. Silicon Motion Technology |
| Identiv vs. ANTA SPORTS PRODUCT | Identiv vs. PLAYTIKA HOLDING DL 01 | Identiv vs. CNVISION MEDIA | Identiv vs. PARKEN Sport Entertainment |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |