Correlation Between Varta AG and Identiv
Can any of the company-specific risk be diversified away by investing in both Varta AG 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 Varta AG and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varta AG and Identiv, you can compare the effects of market volatilities on Varta AG 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 Varta AG with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varta AG and Identiv.
Diversification Opportunities for Varta AG and Identiv
Weak diversification
The 3 months correlation between Varta and Identiv is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Varta AG and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Varta AG 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 Varta AG 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 Varta AG i.e., Varta AG and Identiv go up and down completely randomly.
Pair Corralation between Varta AG and Identiv
Assuming the 90 days trading horizon Varta AG is expected to under-perform the Identiv. In addition to that, Varta AG is 1.73 times more volatile than Identiv. It trades about -0.39 of its total potential returns per unit of risk. Identiv is currently generating about 0.16 per unit of volatility. If you would invest 325.00 in Identiv on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Identiv or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Varta AG vs. Identiv
Performance |
| Timeline |
| Varta AG |
| Identiv |
Varta AG and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varta AG and Identiv
The main advantage of trading using opposite Varta AG and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varta AG 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.| Varta AG vs. Nucletron Electronic Aktiengesellschaft | Varta AG vs. 24SEVENOFFICE GROUP AB | Varta AG vs. Methode Electronics | Varta AG vs. Richardson Electronics |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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