Correlation Between Next Biometrics and Gjensidige Forsikring

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

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

Diversification Opportunities for Next Biometrics and Gjensidige Forsikring

-0.63

Correlation Coefficient

Next Biometrics  Gjensidige Forsikring

Excellent diversification

The 3 months correlation between Next and Gjensidige is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Next Biometrics Group and Gjensidige Forsikring ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gjensidige Forsikring ASA and Next 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 Next Biometrics Group are associated (or correlated) with Gjensidige Forsikring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gjensidige Forsikring ASA has no effect on the direction of Next Biometrics i.e., Next Biometrics and Gjensidige Forsikring go up and down completely randomly.

Pair Corralation between Next Biometrics and Gjensidige Forsikring

Assuming the 90 days trading horizon Next Biometrics Group is expected to under-perform the Gjensidige Forsikring. In addition to that, Next Biometrics is 1.47 times more volatile than Gjensidige Forsikring ASA. It trades about -0.18 of its total potential returns per unit of risk. Gjensidige Forsikring ASA is currently generating about 0.23 per unit of volatility. If you would invest  19,359  in Gjensidige Forsikring ASA on December 30, 2024 and sell it today you would earn a total of  4,601  from holding Gjensidige Forsikring ASA or generate 23.77% return on investment over 90 days.

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

Next Biometrics Group  vs.  Gjensidige Forsikring ASA

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.

Gjensidige Forsikring ASA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gjensidige Forsikring ASA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Gjensidige Forsikring disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Next Biometrics and Gjensidige Forsikring

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

The idea behind Next Biometrics Group and Gjensidige Forsikring ASA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.