Correlation Between Identiv and CompuGroup Medical

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

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

Diversification Opportunities for Identiv and CompuGroup Medical

-0.44

Correlation Coefficient

Identiv  CompuGroup Medical

Very good diversification

The 3 months correlation between Identiv and CompuGroup is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Identiv i.e., Identiv and CompuGroup Medical go up and down completely randomly.

Pair Corralation between Identiv and CompuGroup Medical

Assuming the 90 days trading horizon Identiv is expected to under-perform the CompuGroup Medical. In addition to that, Identiv is 4.06 times more volatile than CompuGroup Medical SE. It trades about -0.03 of its total potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.08 per unit of volatility. If you would invest  2,176  in CompuGroup Medical SE on December 26, 2024 and sell it today you would earn a total of  94.00  from holding CompuGroup Medical SE or generate 4.32% 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.  CompuGroup Medical SE

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.

CompuGroup Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CompuGroup Medical SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CompuGroup Medical 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 CompuGroup Medical

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

The idea behind Identiv and CompuGroup Medical SE 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.