Correlation Between Cofina SGPS and Identiv

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

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

Diversification Opportunities for Cofina SGPS and Identiv

0.32

Correlation Coefficient

Cofina SGPS  Identiv

Weak diversification

The 3 months correlation between Cofina and Identiv is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cofina SGPS SA and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Cofina SGPS 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 Cofina SGPS SA 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 Cofina SGPS i.e., Cofina SGPS and Identiv go up and down completely randomly.

Pair Corralation between Cofina SGPS and Identiv

Assuming the 90 days horizon Cofina SGPS SA is expected to under-perform the Identiv. In addition to that, Cofina SGPS is 3.82 times more volatile than Identiv. It trades about 0.0 of its total potential returns per unit of risk. Identiv is currently generating about 0.07 per unit of volatility. If you would invest  310.00  in Identiv on October 24, 2024 and sell it today you would earn a total of  46.00  from holding Identiv or generate 14.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.78%
Values	Daily Returns

Cofina SGPS SA  vs.  Identiv

Cofina SGPS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cofina SGPS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cofina SGPS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Identiv

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Identiv may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cofina SGPS and Identiv

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