Correlation Between CTS Eventim and Identiv

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

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

Diversification Opportunities for CTS Eventim and Identiv

-0.58

Correlation Coefficient

CTS Eventim  Identiv

Excellent diversification

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

Pair Corralation between CTS Eventim and Identiv

Assuming the 90 days trading horizon CTS Eventim AG is expected to under-perform the Identiv. But the stock apears to be less risky and, when comparing its historical volatility, CTS Eventim AG is 1.3 times less risky than Identiv. The stock trades about -0.08 of its potential returns per unit of risk. The Identiv is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  310.00  in Identiv on October 8, 2024 and sell it today you would earn a total of  41.00  from holding Identiv or generate 13.23% return on investment over 90 days.

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

CTS Eventim AG  vs.  Identiv

CTS Eventim AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTS Eventim AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Identiv

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Identiv reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CTS Eventim and Identiv

The main advantage of trading using opposite CTS Eventim and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS Eventim 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 CTS Eventim AG 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.