Correlation Between Postal Savings and Identiv

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

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

Diversification Opportunities for Postal Savings and Identiv

-0.71

Correlation Coefficient

Postal Savings  Identiv

Pay attention - limited upside

The 3 months correlation between Postal and Identiv is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Postal Savings 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 Postal Savings Bank 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 Postal Savings i.e., Postal Savings and Identiv go up and down completely randomly.

Pair Corralation between Postal Savings and Identiv

Assuming the 90 days horizon Postal Savings is expected to generate 1.32 times less return on investment than Identiv. But when comparing it to its historical volatility, Postal Savings Bank is 2.21 times less risky than Identiv. It trades about 0.19 of its potential returns per unit of risk. Identiv is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  337.00  in Identiv on December 2, 2024 and sell it today you would earn a total of  28.00  from holding Identiv or generate 8.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Postal Savings Bank  vs.  Identiv

Postal Savings Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Postal Savings Bank are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Postal Savings reported solid returns over the last few months and may actually be approaching a breakup point.

Identiv

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Postal Savings and Identiv

The main advantage of trading using opposite Postal Savings and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings 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 Postal Savings Bank 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.