Correlation Between AECOM TECHNOLOGY and Identiv

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

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

Diversification Opportunities for AECOM TECHNOLOGY and Identiv

0.58

Correlation Coefficient

AECOM TECHNOLOGY  Identiv

Very weak diversification

The 3 months correlation between AECOM and Identiv is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and Identiv go up and down completely randomly.

Pair Corralation between AECOM TECHNOLOGY and Identiv

Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to under-perform the Identiv. But the stock apears to be less risky and, when comparing its historical volatility, AECOM TECHNOLOGY is 2.87 times less risky than Identiv. The stock trades about -0.21 of its potential returns per unit of risk. The Identiv is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  374.00  in Identiv on December 2, 2024 and sell it today you would lose (9.00) from holding Identiv or give up 2.41% of portfolio value over 90 days.

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

AECOM TECHNOLOGY  vs.  Identiv

AECOM TECHNOLOGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days AECOM TECHNOLOGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 AECOM TECHNOLOGY and Identiv

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