Correlation Between Identiv and Apple

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

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

Diversification Opportunities for Identiv and Apple

0.58

Correlation Coefficient

Identiv  Apple

Very weak diversification

The 3 months correlation between Identiv and Apple is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Identiv 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 Identiv are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Identiv i.e., Identiv and Apple go up and down completely randomly.

Pair Corralation between Identiv and Apple

Given the investment horizon of 90 days Identiv is expected to under-perform the Apple. In addition to that, Identiv is 2.81 times more volatile than Apple Inc. It trades about -0.01 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.12 per unit of volatility. If you would invest  12,372  in Apple Inc on September 26, 2024 and sell it today you would earn a total of  13,155  from holding Apple Inc or generate 106.33% return on investment over 90 days.

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

Identiv  vs.  Apple Inc

Identiv

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Identiv is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Apple Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Identiv and Apple

The main advantage of trading using opposite Identiv and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.

The idea behind Identiv and Apple Inc 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.