Correlation Between Precise Biometrics and Zignsec AB
Can any of the company-specific risk be diversified away by investing in both Precise Biometrics and Zignsec AB 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 Zignsec AB 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 Zignsec AB, you can compare the effects of market volatilities on Precise Biometrics and Zignsec AB 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 Zignsec AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precise Biometrics and Zignsec AB.
Diversification Opportunities for Precise Biometrics and Zignsec AB
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Precise and Zignsec is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Precise Biometrics AB and Zignsec AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zignsec AB 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 Zignsec AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zignsec AB has no effect on the direction of Precise Biometrics i.e., Precise Biometrics and Zignsec AB go up and down completely randomly.
Pair Corralation between Precise Biometrics and Zignsec AB
Assuming the 90 days trading horizon Precise Biometrics AB is expected to generate 4.91 times more return on investment than Zignsec AB. However, Precise Biometrics is 4.91 times more volatile than Zignsec AB. It trades about 0.32 of its potential returns per unit of risk. Zignsec AB is currently generating about 0.2 per unit of risk. If you would invest 348.00 in Precise Biometrics AB on August 29, 2024 and sell it today you would earn a total of 280.00 from holding Precise Biometrics AB or generate 80.46% 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. Zignsec AB
Performance |
| Timeline |
| Precise Biometrics |
| Zignsec AB |
Precise Biometrics and Zignsec AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precise Biometrics and Zignsec AB
The main advantage of trading using opposite Precise Biometrics and Zignsec AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precise Biometrics position performs unexpectedly, Zignsec AB 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 Zignsec AB will offset losses from the drop in Zignsec AB'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 |
| Zignsec AB vs. Smart Eye AB | Zignsec AB vs. Embracer Group AB | Zignsec AB vs. Zwipe AS | Zignsec AB vs. Sinch 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.
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