Correlation Between Identiv and Nano Dimension

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

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

Diversification Opportunities for Identiv and Nano Dimension

-0.16

Correlation Coefficient

Identiv  Nano Dimension

Good diversification

The 3 months correlation between Identiv and Nano is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Nano Dimension in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Dimension 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 Nano Dimension. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Dimension has no effect on the direction of Identiv i.e., Identiv and Nano Dimension go up and down completely randomly.

Pair Corralation between Identiv and Nano Dimension

Given the investment horizon of 90 days Identiv is expected to generate 0.97 times more return on investment than Nano Dimension. However, Identiv is 1.03 times less risky than Nano Dimension. It trades about 0.13 of its potential returns per unit of risk. Nano Dimension is currently generating about 0.03 per unit of risk. If you would invest  335.00  in Identiv on September 7, 2024 and sell it today you would earn a total of  74.00  from holding Identiv or generate 22.09% return on investment over 90 days.

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

Identiv  vs.  Nano Dimension

Identiv

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Identiv exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nano Dimension

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Dimension are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Nano Dimension is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Identiv and Nano Dimension

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

The idea behind Identiv and Nano Dimension 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.