Correlation Between Impact ISR and Identiv

Can any of the company-specific risk be diversified away by investing in both Impact ISR 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 Impact ISR and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Impact ISR Performance and Identiv, you can compare the effects of market volatilities on Impact ISR 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 Impact ISR with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impact ISR and Identiv.

Diversification Opportunities for Impact ISR and Identiv

-0.08

Correlation Coefficient

Impact ISR  Identiv

Good diversification

The 3 months correlation between Impact and Identiv is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Impact ISR Performance and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Impact ISR 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 Impact ISR Performance 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 Impact ISR i.e., Impact ISR and Identiv go up and down completely randomly.

Pair Corralation between Impact ISR and Identiv

Assuming the 90 days trading horizon Impact ISR Performance is expected to under-perform the Identiv. But the fund apears to be less risky and, when comparing its historical volatility, Impact ISR Performance is 4.65 times less risky than Identiv. The fund trades about -0.06 of its potential returns per unit of risk. The Identiv is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  313.00  in Identiv on October 7, 2024 and sell it today you would earn a total of  38.00  from holding Identiv or generate 12.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Impact ISR Performance  vs.  Identiv

Impact ISR Performance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact ISR Performance has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable basic indicators, Impact ISR is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Identiv

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Identiv reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Impact ISR and Identiv

The main advantage of trading using opposite Impact ISR and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impact ISR 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 Impact ISR Performance 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.