Correlation Between ZIJIN MINH and Identiv

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

By analyzing existing cross correlation between ZIJIN MINH UNSPADR20 and Identiv, you can compare the effects of market volatilities on ZIJIN MINH 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 ZIJIN MINH with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZIJIN MINH and Identiv.

Diversification Opportunities for ZIJIN MINH and Identiv

0.38

Correlation Coefficient

ZIJIN MINH  Identiv

Weak diversification

The 3 months correlation between ZIJIN and Identiv is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ZIJIN MINH UNSPADR20 and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and ZIJIN MINH 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 ZIJIN MINH UNSPADR20 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 ZIJIN MINH i.e., ZIJIN MINH and Identiv go up and down completely randomly.

Pair Corralation between ZIJIN MINH and Identiv

Assuming the 90 days trading horizon ZIJIN MINH is expected to generate 1.14 times less return on investment than Identiv. In addition to that, ZIJIN MINH is 1.24 times more volatile than Identiv. It trades about 0.09 of its total potential returns per unit of risk. Identiv is currently generating about 0.12 per unit of volatility. If you would invest  297.00  in Identiv on August 31, 2024 and sell it today you would earn a total of  65.00  from holding Identiv or generate 21.89% return on investment over 90 days.

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

ZIJIN MINH UNSPADR20  vs.  Identiv

ZIJIN MINH UNSPADR20

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZIJIN MINH UNSPADR20 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ZIJIN MINH reported solid returns over the last few months and may actually be approaching a breakup point.

Identiv

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with ZIJIN MINH and Identiv

The main advantage of trading using opposite ZIJIN MINH and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZIJIN MINH 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 ZIJIN MINH UNSPADR20 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.