Correlation Between PEPKOR and Identiv

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

By analyzing existing cross correlation between PEPKOR LTD and Identiv, you can compare the effects of market volatilities on PEPKOR and Identiv 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 PEPKOR with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of PEPKOR and Identiv.

Diversification Opportunities for PEPKOR and Identiv

0.41

Correlation Coefficient

PEPKOR  Identiv

Very weak diversification

The 3 months correlation between PEPKOR and Identiv is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PEPKOR LTD and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and PEPKOR 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 PEPKOR LTD are associated (or correlated) with Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of PEPKOR i.e., PEPKOR and Identiv go up and down completely randomly.

Pair Corralation between PEPKOR and Identiv

Assuming the 90 days trading horizon PEPKOR LTD is expected to generate 2.81 times more return on investment than Identiv. However, PEPKOR is 2.81 times more volatile than Identiv. It trades about 0.17 of its potential returns per unit of risk. Identiv is currently generating about -0.03 per unit of risk. If you would invest  77.00  in PEPKOR LTD on October 26, 2024 and sell it today you would earn a total of  52.00  from holding PEPKOR LTD or generate 67.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.5%
Values	Daily Returns

PEPKOR LTD  vs.  Identiv

PEPKOR LTD

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PEPKOR LTD are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PEPKOR reported solid returns over the last few months and may actually be approaching a breakup point.

Identiv

Risk-Adjusted Performance

4 of 100

Insignificant

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 February 2025.

Pair Trading with PEPKOR and Identiv

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

The idea behind PEPKOR LTD and Identiv 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.