Correlation Between Nano Dimension and Identiv

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

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

Diversification Opportunities for Nano Dimension and Identiv

-0.14

Correlation Coefficient

Nano Dimension  Identiv

Good diversification

The 3 months correlation between Nano and Identiv is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nano Dimension and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Nano Dimension 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 Nano Dimension 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 Nano Dimension i.e., Nano Dimension and Identiv go up and down completely randomly.

Pair Corralation between Nano Dimension and Identiv

Given the investment horizon of 90 days Nano Dimension is expected to generate 0.81 times more return on investment than Identiv. However, Nano Dimension is 1.23 times less risky than Identiv. It trades about 0.03 of its potential returns per unit of risk. Identiv is currently generating about -0.07 per unit of risk. If you would invest  223.00  in Nano Dimension on September 8, 2024 and sell it today you would earn a total of  18.00  from holding Nano Dimension or generate 8.07% return on investment over 90 days.

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

Nano Dimension  vs.  Identiv

Nano Dimension

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Dimension are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Nano Dimension displayed solid returns over the last few months and may actually be approaching a breakup point.

Identiv

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Identiv exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nano Dimension and Identiv

The main advantage of trading using opposite Nano Dimension and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano Dimension 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 Nano Dimension 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.