Correlation Between Image Systems and Northbaze Group
Can any of the company-specific risk be diversified away by investing in both Image Systems and Northbaze Group 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 Image Systems and Northbaze Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Image Systems AB and Northbaze Group AB, you can compare the effects of market volatilities on Image Systems and Northbaze Group 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 Image Systems with a short position of Northbaze Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Image Systems and Northbaze Group.
Diversification Opportunities for Image Systems and Northbaze Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Image and Northbaze is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Image Systems AB and Northbaze Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northbaze Group AB and Image Systems 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 Image Systems AB are associated (or correlated) with Northbaze Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northbaze Group AB has no effect on the direction of Image Systems i.e., Image Systems and Northbaze Group go up and down completely randomly.
Pair Corralation between Image Systems and Northbaze Group
Assuming the 90 days horizon Image Systems is expected to generate 1.22 times less return on investment than Northbaze Group. But when comparing it to its historical volatility, Image Systems AB is 3.52 times less risky than Northbaze Group. It trades about 0.06 of its potential returns per unit of risk. Northbaze Group AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Northbaze Group AB on August 28, 2024 and sell it today you would lose (23.00) from holding Northbaze Group AB or give up 60.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Image Systems AB vs. Northbaze Group AB
Performance |
| Timeline |
| Image Systems AB |
| Northbaze Group AB |
Image Systems and Northbaze Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Image Systems and Northbaze Group
The main advantage of trading using opposite Image Systems and Northbaze Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Image Systems position performs unexpectedly, Northbaze Group 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 Northbaze Group will offset losses from the drop in Northbaze Group's long position.| Image Systems vs. Precise Biometrics AB | Image Systems vs. Anoto Group AB | Image Systems vs. Bong AB | Image Systems vs. Episurf Medical AB |
| Northbaze Group vs. Image Systems AB | Northbaze Group vs. Advenica AB | Northbaze Group vs. Leading Edge Materials | Northbaze Group vs. Kancera 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Correlations Find global opportunities by holding instruments from different markets |