Correlation Between Intel and Identiv

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

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

Diversification Opportunities for Intel and Identiv

0.85

Correlation Coefficient

Intel  Identiv

Very poor diversification

The 3 months correlation between Intel and Identiv is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Intel 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 Intel 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 Intel i.e., Intel and Identiv go up and down completely randomly.

Pair Corralation between Intel and Identiv

Assuming the 90 days trading horizon Intel is expected to generate 0.36 times more return on investment than Identiv. However, Intel is 2.75 times less risky than Identiv. It trades about -0.53 of its potential returns per unit of risk. Identiv is currently generating about -0.25 per unit of risk. If you would invest  4,148  in Intel on January 30, 2024 and sell it today you would lose (1,125) from holding Intel or give up 27.12% of portfolio value over 90 days.

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

Intel  vs.  Identiv

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Identiv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Identiv has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Intel and Identiv

The main advantage of trading using opposite Intel and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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 Intel 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.