Correlation Between Precise Biometrics and Atea ASA
Can any of the company-specific risk be diversified away by investing in both Precise Biometrics and Atea 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 Precise Biometrics and Atea ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precise Biometrics AB and Atea ASA, you can compare the effects of market volatilities on Precise Biometrics and Atea 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 Precise Biometrics with a short position of Atea ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precise Biometrics and Atea ASA.
Diversification Opportunities for Precise Biometrics and Atea ASA
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Precise and Atea is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Precise Biometrics AB and Atea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea ASA and Precise 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 Precise Biometrics AB are associated (or correlated) with Atea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea ASA has no effect on the direction of Precise Biometrics i.e., Precise Biometrics and Atea ASA go up and down completely randomly.
Pair Corralation between Precise Biometrics and Atea ASA
Assuming the 90 days trading horizon Precise Biometrics AB is expected to generate 7.31 times more return on investment than Atea ASA. However, Precise Biometrics is 7.31 times more volatile than Atea ASA. It trades about 0.34 of its potential returns per unit of risk. Atea ASA is currently generating about -0.01 per unit of risk. If you would invest 322.00 in Precise Biometrics AB on September 3, 2024 and sell it today you would earn a total of 264.00 from holding Precise Biometrics AB or generate 81.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precise Biometrics AB vs. Atea ASA
Performance |
| Timeline |
| Precise Biometrics |
| Atea ASA |
Precise Biometrics and Atea ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precise Biometrics and Atea ASA
The main advantage of trading using opposite Precise Biometrics and Atea ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precise Biometrics position performs unexpectedly, Atea 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 Atea ASA will offset losses from the drop in Atea ASA's long position.| Precise Biometrics vs. Fingerprint Cards AB | Precise Biometrics vs. Anoto Group AB | Precise Biometrics vs. Next Biometrics Group | Precise Biometrics vs. Idex ASA |
| Atea ASA vs. Gjensidige Forsikring ASA | Atea ASA vs. Veidekke ASA | Atea ASA vs. Orkla ASA | Atea ASA vs. Aker 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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