Correlation Between Identiv and Sea

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

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

Diversification Opportunities for Identiv and Sea

-0.43

Correlation Coefficient

Identiv  Sea

Very good diversification

The 3 months correlation between Identiv and Sea is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Sea Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Limited 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Limited has no effect on the direction of Identiv i.e., Identiv and Sea go up and down completely randomly.

Pair Corralation between Identiv and Sea

Assuming the 90 days trading horizon Identiv is expected to under-perform the Sea. In addition to that, Identiv is 1.42 times more volatile than Sea Limited. It trades about -0.04 of its total potential returns per unit of risk. Sea Limited is currently generating about 0.12 per unit of volatility. If you would invest  10,340  in Sea Limited on December 29, 2024 and sell it today you would earn a total of  1,980  from holding Sea Limited or generate 19.15% 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.  Sea Limited

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 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.

Sea Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sea Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sea reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Identiv and Sea

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

The idea behind Identiv and Sea Limited 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.