Correlation Between Next Biometrics and Arribatec Solutions
Can any of the company-specific risk be diversified away by investing in both Next Biometrics and Arribatec Solutions 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 Arribatec Solutions 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 Arribatec Solutions ASA, you can compare the effects of market volatilities on Next Biometrics and Arribatec Solutions 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 Arribatec Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Biometrics and Arribatec Solutions.
Diversification Opportunities for Next Biometrics and Arribatec Solutions
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Next and Arribatec is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Next Biometrics Group and Arribatec Solutions ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arribatec Solutions ASA 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 Arribatec Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arribatec Solutions ASA has no effect on the direction of Next Biometrics i.e., Next Biometrics and Arribatec Solutions go up and down completely randomly.
Pair Corralation between Next Biometrics and Arribatec Solutions
Assuming the 90 days trading horizon Next Biometrics Group is expected to generate 0.45 times more return on investment than Arribatec Solutions. However, Next Biometrics Group is 2.21 times less risky than Arribatec Solutions. It trades about 0.0 of its potential returns per unit of risk. Arribatec Solutions ASA is currently generating about -0.22 per unit of risk. If you would invest 694.00 in Next Biometrics Group on November 3, 2024 and sell it today you would lose (6.00) from holding Next Biometrics Group or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Biometrics Group vs. Arribatec Solutions ASA
Performance |
| Timeline |
| Next Biometrics Group |
| Arribatec Solutions ASA |
Next Biometrics and Arribatec Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Biometrics and Arribatec Solutions
The main advantage of trading using opposite Next Biometrics and Arribatec Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Biometrics position performs unexpectedly, Arribatec Solutions 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 Arribatec Solutions will offset losses from the drop in Arribatec Solutions' long position.| Next Biometrics vs. Idex ASA | Next Biometrics vs. XXL ASA | Next Biometrics vs. Bergenbio ASA | Next Biometrics vs. Precise Biometrics AB |
| Arribatec Solutions vs. Next Biometrics Group | Arribatec Solutions vs. Endur ASA | Arribatec Solutions vs. Saga Pure ASA | Arribatec Solutions vs. Idex 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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