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
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Integrated and Next is 0.53. 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 under-perform the Next Biometrics. In addition to that, Integrated Wind is 1.15 times more volatile than Next Biometrics Group. It trades about -0.08 of its total potential returns per unit of risk. Next Biometrics Group is currently generating about -0.06 per unit of volatility. If you would invest 648.00 in Next Biometrics Group on December 2, 2024 and sell it today you would lose (60.00) from holding Next Biometrics Group or give up 9.26% 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
Performance |
Timeline |
Integrated Wind Solutions |
Next Biometrics Group |
Integrated Wind and Next Biometrics Volatility Contrast
Predicted Return Density |
Returns |
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.Integrated Wind vs. Edda Wind ASA | Integrated Wind vs. Cloudberry Clean Energy | Integrated Wind vs. Cadeler As | Integrated Wind vs. Otovo AS |
Next Biometrics vs. Idex ASA | Next Biometrics vs. XXL ASA | Next Biometrics vs. Bergenbio ASA | Next Biometrics vs. Precise Biometrics 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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