Correlation Between SHELF DRILLING and Identiv

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

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

Diversification Opportunities for SHELF DRILLING and Identiv

0.6

Correlation Coefficient

SHELF DRILLING  Identiv

Poor diversification

The 3 months correlation between SHELF and Identiv is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SHELF DRILLING LTD and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and SHELF DRILLING 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 SHELF DRILLING LTD 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 SHELF DRILLING i.e., SHELF DRILLING and Identiv go up and down completely randomly.

Pair Corralation between SHELF DRILLING and Identiv

Assuming the 90 days horizon SHELF DRILLING LTD is expected to under-perform the Identiv. But the stock apears to be less risky and, when comparing its historical volatility, SHELF DRILLING LTD is 1.07 times less risky than Identiv. The stock trades about -0.1 of its potential returns per unit of risk. The Identiv is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  348.00  in Identiv on December 30, 2024 and sell it today you would lose (52.00) from holding Identiv or give up 14.94% of portfolio value over 90 days.

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

SHELF DRILLING LTD  vs.  Identiv

SHELF DRILLING LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days SHELF DRILLING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SHELF DRILLING and Identiv

The main advantage of trading using opposite SHELF DRILLING and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHELF DRILLING 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 SHELF DRILLING LTD 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.