Correlation Between Axactor SE and Next Biometrics
Can any of the company-specific risk be diversified away by investing in both Axactor SE and Next Biometrics 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 Axactor SE and Next Biometrics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axactor SE and Next Biometrics Group, you can compare the effects of market volatilities on Axactor SE and Next Biometrics 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 Axactor SE with a short position of Next Biometrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axactor SE and Next Biometrics.
Diversification Opportunities for Axactor SE and Next Biometrics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axactor and Next is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Axactor SE and Next Biometrics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Biometrics Group and Axactor SE 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 Axactor SE are associated (or correlated) with Next Biometrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Biometrics Group has no effect on the direction of Axactor SE i.e., Axactor SE and Next Biometrics go up and down completely randomly.
Pair Corralation between Axactor SE and Next Biometrics
Assuming the 90 days trading horizon Axactor SE is expected to under-perform the Next Biometrics. In addition to that, Axactor SE is 1.25 times more volatile than Next Biometrics Group. It trades about -0.16 of its total potential returns per unit of risk. Next Biometrics Group is currently generating about -0.13 per unit of volatility. If you would invest 788.00 in Next Biometrics Group on September 2, 2024 and sell it today you would lose (128.00) from holding Next Biometrics Group or give up 16.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axactor SE vs. Next Biometrics Group
Performance |
| Timeline |
| Axactor SE |
| Next Biometrics Group |
Axactor SE and Next Biometrics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axactor SE and Next Biometrics
The main advantage of trading using opposite Axactor SE and Next Biometrics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axactor SE position performs unexpectedly, Next Biometrics 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 Next Biometrics will offset losses from the drop in Next Biometrics' long position.| Axactor SE vs. Storebrand ASA | Axactor SE vs. Aker BP ASA | Axactor SE vs. MPC Container Ships | Axactor SE vs. Norske Skog Asa |
| Next Biometrics vs. Idex ASA | Next Biometrics vs. XXL ASA | Next Biometrics vs. Bergenbio ASA | Next Biometrics vs. Precise Biometrics AB |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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