Correlation Between REGAL ASIAN and Identiv

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

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

Diversification Opportunities for REGAL ASIAN and Identiv

-0.53

Correlation Coefficient

REGAL ASIAN  Identiv

Excellent diversification

The 3 months correlation between REGAL and Identiv is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 REGAL ASIAN i.e., REGAL ASIAN and Identiv go up and down completely randomly.

Pair Corralation between REGAL ASIAN and Identiv

Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 0.38 times more return on investment than Identiv. However, REGAL ASIAN INVESTMENTS is 2.6 times less risky than Identiv. It trades about 0.01 of its potential returns per unit of risk. Identiv is currently generating about -0.02 per unit of risk. If you would invest  122.00  in REGAL ASIAN INVESTMENTS on October 4, 2024 and sell it today you would earn a total of  2.00  from holding REGAL ASIAN INVESTMENTS or generate 1.64% return on investment over 90 days.

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

REGAL ASIAN INVESTMENTS  vs.  Identiv

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REGAL ASIAN INVESTMENTS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, REGAL ASIAN 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

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Identiv reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with REGAL ASIAN and Identiv

The main advantage of trading using opposite REGAL ASIAN and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.