Correlation Between Next Biometrics and Storebrand ASA
Can any of the company-specific risk be diversified away by investing in both Next Biometrics and Storebrand ASA 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 Storebrand ASA 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 Storebrand ASA, you can compare the effects of market volatilities on Next Biometrics and Storebrand ASA 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 Storebrand ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Biometrics and Storebrand ASA.
Diversification Opportunities for Next Biometrics and Storebrand ASA
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Next and Storebrand is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Next Biometrics Group and Storebrand ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storebrand 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 Storebrand ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storebrand ASA has no effect on the direction of Next Biometrics i.e., Next Biometrics and Storebrand ASA go up and down completely randomly.
Pair Corralation between Next Biometrics and Storebrand ASA
Assuming the 90 days trading horizon Next Biometrics Group is expected to under-perform the Storebrand ASA. In addition to that, Next Biometrics is 1.68 times more volatile than Storebrand ASA. It trades about -0.08 of its total potential returns per unit of risk. Storebrand ASA is currently generating about 0.04 per unit of volatility. If you would invest 12,040 in Storebrand ASA on September 12, 2024 and sell it today you would earn a total of 210.00 from holding Storebrand ASA or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Biometrics Group vs. Storebrand ASA
Performance |
| Timeline |
| Next Biometrics Group |
| Storebrand ASA |
Next Biometrics and Storebrand ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Biometrics and Storebrand ASA
The main advantage of trading using opposite Next Biometrics and Storebrand ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Biometrics position performs unexpectedly, Storebrand ASA 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 Storebrand ASA will offset losses from the drop in Storebrand ASA's long position.| Next Biometrics vs. Storebrand ASA | Next Biometrics vs. DnB ASA | Next Biometrics vs. Telenor ASA | Next Biometrics vs. Kongsberg Gruppen ASA |
| Storebrand ASA vs. DnB ASA | Storebrand ASA vs. Gjensidige Forsikring ASA | Storebrand ASA vs. Orkla ASA | Storebrand ASA vs. Telenor 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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