Correlation Between Logitech International and Identiv

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Can any of the company-specific risk be diversified away by investing in both Logitech International 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 Logitech International and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logitech International SA and Identiv, you can compare the effects of market volatilities on Logitech International 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 Logitech International with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and Identiv.

Diversification Opportunities for Logitech International and Identiv

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Logitech and Identiv is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Logitech International 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 Logitech International SA 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 Logitech International i.e., Logitech International and Identiv go up and down completely randomly.

Pair Corralation between Logitech International and Identiv

Given the investment horizon of 90 days Logitech International SA is expected to generate 0.47 times more return on investment than Identiv. However, Logitech International SA is 2.13 times less risky than Identiv. It trades about 0.0 of its potential returns per unit of risk. Identiv is currently generating about -0.11 per unit of risk. If you would invest  8,994  in Logitech International SA on December 29, 2023 and sell it today you would lose (33.84) from holding Logitech International SA or give up 0.38% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

Logitech International SA  vs.  Identiv

 Performance 
       Timeline  
Logitech International 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Logitech International SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Logitech International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
Identiv 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Identiv has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Identiv is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Logitech International and Identiv Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Logitech International and Identiv

The main advantage of trading using opposite Logitech International and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logitech International 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 Logitech International SA 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.
Check out your portfolio center.
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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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