Correlation Between Precise Biometrics and Bergenbio ASA
Can any of the company-specific risk be diversified away by investing in both Precise Biometrics and Bergenbio 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 Bergenbio 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 Bergenbio ASA, you can compare the effects of market volatilities on Precise Biometrics and Bergenbio 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 Bergenbio ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precise Biometrics and Bergenbio ASA.
Diversification Opportunities for Precise Biometrics and Bergenbio ASA
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Precise and Bergenbio is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Precise Biometrics AB and Bergenbio ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergenbio 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 Bergenbio ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergenbio ASA has no effect on the direction of Precise Biometrics i.e., Precise Biometrics and Bergenbio ASA go up and down completely randomly.
Pair Corralation between Precise Biometrics and Bergenbio ASA
Assuming the 90 days trading horizon Precise Biometrics AB is expected to generate 1.32 times more return on investment than Bergenbio ASA. However, Precise Biometrics is 1.32 times more volatile than Bergenbio ASA. It trades about 0.06 of its potential returns per unit of risk. Bergenbio ASA is currently generating about 0.0 per unit of risk. If you would invest 451.00 in Precise Biometrics AB on September 1, 2024 and sell it today you would earn a total of 135.00 from holding Precise Biometrics AB or generate 29.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Precise Biometrics AB vs. Bergenbio ASA
Performance |
| Timeline |
| Precise Biometrics |
| Bergenbio ASA |
Precise Biometrics and Bergenbio ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precise Biometrics and Bergenbio ASA
The main advantage of trading using opposite Precise Biometrics and Bergenbio ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precise Biometrics position performs unexpectedly, Bergenbio 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 Bergenbio ASA will offset losses from the drop in Bergenbio ASA's long position.| Precise Biometrics vs. Enea AB | Precise Biometrics vs. Novotek AB | Precise Biometrics vs. Addnode Group AB | Precise Biometrics vs. Softronic AB |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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