Correlation Between IDEX Biometrics and Blackboxstocks

Can any of the company-specific risk be diversified away by investing in both IDEX Biometrics and Blackboxstocks 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 Blackboxstocks 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 Blackboxstocks, you can compare the effects of market volatilities on IDEX Biometrics and Blackboxstocks 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 Blackboxstocks. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDEX Biometrics and Blackboxstocks.

Diversification Opportunities for IDEX Biometrics and Blackboxstocks

0.51

Correlation Coefficient

IDEX Biometrics  Blackboxstocks

Very weak diversification

The 3 months correlation between IDEX and Blackboxstocks is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding IDEX Biometrics ASA and Blackboxstocks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackboxstocks 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 Blackboxstocks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackboxstocks has no effect on the direction of IDEX Biometrics i.e., IDEX Biometrics and Blackboxstocks go up and down completely randomly.

Pair Corralation between IDEX Biometrics and Blackboxstocks

If you would invest  197.00  in Blackboxstocks on September 3, 2024 and sell it today you would earn a total of  58.00  from holding Blackboxstocks or generate 29.44% return on investment over 90 days.

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

IDEX Biometrics ASA  vs.  Blackboxstocks

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 nearly stable basic indicators, IDEX Biometrics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Blackboxstocks

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackboxstocks are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental drivers, Blackboxstocks showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IDEX Biometrics and Blackboxstocks

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

The idea behind IDEX Biometrics ASA and Blackboxstocks 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .