Correlation Between Nordic Technology and Next Biometrics
Can any of the company-specific risk be diversified away by investing in both Nordic Technology 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 Nordic Technology and Next Biometrics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Technology Group and Next Biometrics Group, you can compare the effects of market volatilities on Nordic Technology 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 Nordic Technology with a short position of Next Biometrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Next Biometrics.
Diversification Opportunities for Nordic Technology and Next Biometrics
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordic and Next is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group 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 Nordic Technology 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 Nordic Technology Group 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 Nordic Technology i.e., Nordic Technology and Next Biometrics go up and down completely randomly.
Pair Corralation between Nordic Technology and Next Biometrics
Assuming the 90 days trading horizon Nordic Technology Group is expected to generate 0.19 times more return on investment than Next Biometrics. However, Nordic Technology Group is 5.15 times less risky than Next Biometrics. It trades about -0.13 of its potential returns per unit of risk. Next Biometrics Group is currently generating about -0.08 per unit of risk. If you would invest 274.00 in Nordic Technology Group on August 31, 2024 and sell it today you would lose (4.00) from holding Nordic Technology Group or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nordic Technology Group vs. Next Biometrics Group
Performance |
| Timeline |
| Nordic Technology |
| Next Biometrics Group |
Nordic Technology and Next Biometrics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Technology and Next Biometrics
The main advantage of trading using opposite Nordic Technology and Next Biometrics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology 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.| Nordic Technology vs. Next Biometrics Group | Nordic Technology vs. Elkem ASA | Nordic Technology vs. Integrated Wind Solutions | Nordic Technology vs. Vow 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |