Correlation Between Wells Fargo and Identiv
Can any of the company-specific risk be diversified away by investing in both Wells Fargo 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 Wells Fargo and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between West Fraser Timber and Identiv, you can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Identiv.
Diversification Opportunities for Wells Fargo and Identiv
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wells and Identiv is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding West Fraser Timber and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Wells Fargo 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 West Fraser Timber 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 Wells Fargo i.e., Wells Fargo and Identiv go up and down completely randomly.
Pair Corralation between Wells Fargo and Identiv
Assuming the 90 days horizon West Fraser Timber is expected to generate 0.44 times more return on investment than Identiv. However, West Fraser Timber is 2.26 times less risky than Identiv. It trades about 0.03 of its potential returns per unit of risk. Identiv is currently generating about -0.03 per unit of risk. If you would invest 7,622 in West Fraser Timber on September 12, 2024 and sell it today you would earn a total of 1,153 from holding West Fraser Timber or generate 15.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
West Fraser Timber vs. Identiv
Performance |
| Timeline |
| West Fraser Timber |
| Identiv |
Wells Fargo and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Identiv
The main advantage of trading using opposite Wells Fargo and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo 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.| Wells Fargo vs. Charter Communications | Wells Fargo vs. Zoom Video Communications | Wells Fargo vs. Shenandoah Telecommunications | Wells Fargo vs. Highlight Communications AG |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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