Correlation Between Idex Biometrics and TROOPS

Can any of the company-specific risk be diversified away by investing in both Idex Biometrics and TROOPS 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 Idex Biometrics and TROOPS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Idex Biometrics ASA and TROOPS Inc, you can compare the effects of market volatilities on Idex Biometrics and TROOPS 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 Idex Biometrics with a short position of TROOPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Idex Biometrics and TROOPS.

Diversification Opportunities for Idex Biometrics and TROOPS

0.89

Correlation Coefficient

Idex Biometrics  TROOPS

Very poor diversification

The 3 months correlation between Idex and TROOPS is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Idex Biometrics ASA and TROOPS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROOPS Inc and Idex 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 Idex Biometrics ASA are associated (or correlated) with TROOPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROOPS Inc has no effect on the direction of Idex Biometrics i.e., Idex Biometrics and TROOPS go up and down completely randomly.

Pair Corralation between Idex Biometrics and TROOPS

If you would invest  481.00  in Idex Biometrics ASA on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Idex Biometrics ASA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.56%
Values	Daily Returns

Idex Biometrics ASA  vs.  TROOPS Inc

Idex Biometrics ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idex Biometrics ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Idex Biometrics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

TROOPS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TROOPS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Idex Biometrics and TROOPS

The main advantage of trading using opposite Idex Biometrics and TROOPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idex Biometrics position performs unexpectedly, TROOPS 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 TROOPS will offset losses from the drop in TROOPS's long position.

The idea behind Idex Biometrics ASA and TROOPS Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.