Correlation Between Integrated Wind and Next Biometrics

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

By analyzing existing cross correlation between Integrated Wind Solutions and Next Biometrics Group, you can compare the effects of market volatilities on Integrated Wind and Next Biometrics 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 Integrated Wind with a short position of Next Biometrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Wind and Next Biometrics.

Diversification Opportunities for Integrated Wind and Next Biometrics

0.51

Correlation Coefficient

Integrated Wind  Next Biometrics

Very weak diversification

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

Pair Corralation between Integrated Wind and Next Biometrics

Assuming the 90 days trading horizon Integrated Wind Solutions is expected to generate 1.13 times more return on investment than Next Biometrics. However, Integrated Wind is 1.13 times more volatile than Next Biometrics Group. It trades about -0.07 of its potential returns per unit of risk. Next Biometrics Group is currently generating about -0.18 per unit of risk. If you would invest  4,780  in Integrated Wind Solutions on December 30, 2024 and sell it today you would lose (600.00) from holding Integrated Wind Solutions or give up 12.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Integrated Wind Solutions  vs.  Next Biometrics Group

Integrated Wind Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrated Wind Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Next Biometrics Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Next Biometrics Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Integrated Wind and Next Biometrics

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

The idea behind Integrated Wind Solutions and Next Biometrics Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.