Correlation Between Identiv and TransAct Technologies

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

By analyzing existing cross correlation between Identiv and TransAct Technologies Incorporated, you can compare the effects of market volatilities on Identiv and TransAct Technologies 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 TransAct Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and TransAct Technologies.

Diversification Opportunities for Identiv and TransAct Technologies

-0.29

Correlation Coefficient

Identiv  TransAct Technologies

Very good diversification

The 3 months correlation between Identiv and TransAct is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and TransAct Technologies Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAct Technologies 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 TransAct Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAct Technologies has no effect on the direction of Identiv i.e., Identiv and TransAct Technologies go up and down completely randomly.

Pair Corralation between Identiv and TransAct Technologies

Given the investment horizon of 90 days Identiv is expected to generate 1.21 times more return on investment than TransAct Technologies. However, Identiv is 1.21 times more volatile than TransAct Technologies Incorporated. It trades about 0.13 of its potential returns per unit of risk. TransAct Technologies Incorporated is currently generating about 0.0 per unit of risk. If you would invest  323.00  in Identiv on September 2, 2024 and sell it today you would earn a total of  75.00  from holding Identiv or generate 23.22% return on investment over 90 days.

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

Identiv  vs.  TransAct Technologies Incorpor

Identiv

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Identiv exhibited solid returns over the last few months and may actually be approaching a breakup point.

TransAct Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TransAct Technologies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, TransAct Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Identiv and TransAct Technologies

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

The idea behind Identiv and TransAct Technologies Incorporated 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.