Correlation Between Identiv and REDSUN PROPERTIES

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

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

Diversification Opportunities for Identiv and REDSUN PROPERTIES

-0.56

Correlation Coefficient

Identiv  REDSUN PROPERTIES

Excellent diversification

The 3 months correlation between Identiv and REDSUN is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and REDSUN PROPERTIES GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REDSUN PROPERTIES 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 REDSUN PROPERTIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REDSUN PROPERTIES has no effect on the direction of Identiv i.e., Identiv and REDSUN PROPERTIES go up and down completely randomly.

Pair Corralation between Identiv and REDSUN PROPERTIES

Assuming the 90 days trading horizon Identiv is expected to generate 0.13 times more return on investment than REDSUN PROPERTIES. However, Identiv is 7.58 times less risky than REDSUN PROPERTIES. It trades about 0.07 of its potential returns per unit of risk. REDSUN PROPERTIES GROUP is currently generating about -0.01 per unit of risk. If you would invest  313.00  in Identiv on October 5, 2024 and sell it today you would earn a total of  35.00  from holding Identiv or generate 11.18% return on investment over 90 days.

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

Identiv  vs.  REDSUN PROPERTIES GROUP

Identiv

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Identiv has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Identiv reported solid returns over the last few months and may actually be approaching a breakup point.

REDSUN PROPERTIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REDSUN PROPERTIES GROUP 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 Identiv and REDSUN PROPERTIES

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

The idea behind Identiv and REDSUN PROPERTIES GROUP 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.