Correlation Between Echiquier Major and Identiv

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Can any of the company-specific risk be diversified away by investing in both Echiquier Major 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 Echiquier Major and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echiquier Major SRI and Identiv, you can compare the effects of market volatilities on Echiquier Major 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 Echiquier Major with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echiquier Major and Identiv.

Diversification Opportunities for Echiquier Major and Identiv

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Echiquier and Identiv is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Echiquier Major SRI and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Echiquier Major 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 Echiquier Major SRI 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 Echiquier Major i.e., Echiquier Major and Identiv go up and down completely randomly.

Pair Corralation between Echiquier Major and Identiv

Assuming the 90 days trading horizon Echiquier Major SRI is expected to generate 0.21 times more return on investment than Identiv. However, Echiquier Major SRI is 4.66 times less risky than Identiv. It trades about 0.2 of its potential returns per unit of risk. Identiv is currently generating about -0.05 per unit of risk. If you would invest  40,352  in Echiquier Major SRI on September 22, 2024 and sell it today you would earn a total of  1,322  from holding Echiquier Major SRI or generate 3.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Echiquier Major SRI  vs.  Identiv

 Performance 
       Timeline  
Echiquier Major SRI 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Echiquier Major SRI are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Echiquier Major is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Identiv 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Identiv may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Echiquier Major and Identiv Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Echiquier Major and Identiv

The main advantage of trading using opposite Echiquier Major and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echiquier Major 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.
The idea behind Echiquier Major SRI and Identiv pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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