Correlation Between Identiv and Lyxor 1

Can any of the company-specific risk be diversified away by investing in both Identiv and Lyxor 1 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 Lyxor 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Identiv and Lyxor 1 , you can compare the effects of market volatilities on Identiv and Lyxor 1 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 Lyxor 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Lyxor 1.

Diversification Opportunities for Identiv and Lyxor 1

0.74

Correlation Coefficient

Identiv  Lyxor 1

Poor diversification

The 3 months correlation between Identiv and Lyxor is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Lyxor 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor 1 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 Lyxor 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor 1 has no effect on the direction of Identiv i.e., Identiv and Lyxor 1 go up and down completely randomly.

Pair Corralation between Identiv and Lyxor 1

Assuming the 90 days trading horizon Identiv is expected to under-perform the Lyxor 1. In addition to that, Identiv is 4.88 times more volatile than Lyxor 1 . It trades about -0.05 of its total potential returns per unit of risk. Lyxor 1 is currently generating about 0.18 per unit of volatility. If you would invest  2,429  in Lyxor 1 on September 22, 2024 and sell it today you would earn a total of  69.00  from holding Lyxor 1 or generate 2.84% return on investment over 90 days.

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

Identiv  vs.  Lyxor 1

Identiv

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Identiv may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lyxor 1

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor 1 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Lyxor 1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Identiv and Lyxor 1

The main advantage of trading using opposite Identiv and Lyxor 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, Lyxor 1 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 Lyxor 1 will offset losses from the drop in Lyxor 1's long position.

The idea behind Identiv and Lyxor 1 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.