Correlation Between Next Biometrics and Questerre Energy

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

Diversification Opportunities for Next Biometrics and Questerre Energy

-0.74

Correlation Coefficient

Next Biometrics  Questerre Energy

Pay attention - limited upside

The 3 months correlation between Next and Questerre is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Next Biometrics Group and Questerre Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questerre Energy 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 Questerre Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questerre Energy has no effect on the direction of Next Biometrics i.e., Next Biometrics and Questerre Energy go up and down completely randomly.

Pair Corralation between Next Biometrics and Questerre Energy

Assuming the 90 days trading horizon Next Biometrics Group is expected to under-perform the Questerre Energy. But the stock apears to be less risky and, when comparing its historical volatility, Next Biometrics Group is 1.55 times less risky than Questerre Energy. The stock trades about -0.19 of its potential returns per unit of risk. The Questerre Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  196.00  in Questerre Energy on December 31, 2024 and sell it today you would earn a total of  14.00  from holding Questerre Energy or generate 7.14% 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.  Questerre Energy

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 May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Questerre Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Questerre Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Questerre Energy may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Next Biometrics and Questerre Energy

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

The idea behind Next Biometrics Group and Questerre Energy 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.