Correlation Between Next Biometrics and Axactor SE
Can any of the company-specific risk be diversified away by investing in both Next Biometrics and Axactor SE 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 Next Biometrics and Axactor SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Biometrics Group and Axactor SE, you can compare the effects of market volatilities on Next Biometrics and Axactor SE 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 Next Biometrics with a short position of Axactor SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Biometrics and Axactor SE.
Diversification Opportunities for Next Biometrics and Axactor SE
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Next and Axactor is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Next Biometrics Group and Axactor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axactor SE and Next Biometrics 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 Next Biometrics Group are associated (or correlated) with Axactor SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axactor SE has no effect on the direction of Next Biometrics i.e., Next Biometrics and Axactor SE go up and down completely randomly.
Pair Corralation between Next Biometrics and Axactor SE
Assuming the 90 days trading horizon Next Biometrics Group is expected to under-perform the Axactor SE. But the stock apears to be less risky and, when comparing its historical volatility, Next Biometrics Group is 1.04 times less risky than Axactor SE. The stock trades about -0.19 of its potential returns per unit of risk. The Axactor SE is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 386.00 in Axactor SE on November 29, 2024 and sell it today you would earn a total of 74.00 from holding Axactor SE or generate 19.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Biometrics Group vs. Axactor SE
Performance |
| Timeline |
| Next Biometrics Group |
| Axactor SE |
Next Biometrics and Axactor SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Biometrics and Axactor SE
The main advantage of trading using opposite Next Biometrics and Axactor SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Biometrics position performs unexpectedly, Axactor SE 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 Axactor SE will offset losses from the drop in Axactor SE's long position.| Next Biometrics vs. Idex ASA | Next Biometrics vs. XXL ASA | Next Biometrics vs. Bergenbio ASA | Next Biometrics vs. Precise Biometrics AB |
| Axactor SE vs. Storebrand ASA | Axactor SE vs. Aker BP ASA | Axactor SE vs. MPC Container Ships | Axactor SE vs. Norske Skog Asa |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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