Correlation Between Identiv and BerolinaCapital Premium

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

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

Diversification Opportunities for Identiv and BerolinaCapital Premium

0.88

Correlation Coefficient

Identiv  BerolinaCapital Premium

Very poor diversification

The 3 months correlation between Identiv and BerolinaCapital is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and BerolinaCapital Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BerolinaCapital Premium 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 BerolinaCapital Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BerolinaCapital Premium has no effect on the direction of Identiv i.e., Identiv and BerolinaCapital Premium go up and down completely randomly.

Pair Corralation between Identiv and BerolinaCapital Premium

Assuming the 90 days trading horizon Identiv is expected to generate 3.01 times more return on investment than BerolinaCapital Premium. However, Identiv is 3.01 times more volatile than BerolinaCapital Premium. It trades about 0.15 of its potential returns per unit of risk. BerolinaCapital Premium is currently generating about 0.14 per unit of risk. If you would invest  306.00  in Identiv on September 15, 2024 and sell it today you would earn a total of  91.00  from holding Identiv or generate 29.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	93.85%
Values	Daily Returns

Identiv  vs.  BerolinaCapital Premium

Identiv

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 12 (%) 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.

BerolinaCapital Premium

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BerolinaCapital Premium are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly weak fundamental indicators, BerolinaCapital Premium may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Identiv and BerolinaCapital Premium

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

The idea behind Identiv and BerolinaCapital Premium 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 Anywhere module to track or share privately all of your investments from the convenience of any device.