Correlation Between Precise Biometrics and Anoto Group

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

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

Diversification Opportunities for Precise Biometrics and Anoto Group

0.16

Correlation Coefficient

Precise Biometrics  Anoto Group

Average diversification

The 3 months correlation between Precise and Anoto is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Precise Biometrics AB and Anoto Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anoto Group AB and Precise 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 Precise Biometrics AB are associated (or correlated) with Anoto Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anoto Group AB has no effect on the direction of Precise Biometrics i.e., Precise Biometrics and Anoto Group go up and down completely randomly.

Pair Corralation between Precise Biometrics and Anoto Group

Assuming the 90 days trading horizon Precise Biometrics AB is expected to under-perform the Anoto Group. But the stock apears to be less risky and, when comparing its historical volatility, Precise Biometrics AB is 2.52 times less risky than Anoto Group. The stock trades about -0.17 of its potential returns per unit of risk. The Anoto Group AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Anoto Group AB on November 29, 2024 and sell it today you would lose (4.40) from holding Anoto Group AB or give up 36.67% of portfolio value over 90 days.

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

Precise Biometrics AB  vs.  Anoto Group AB

Precise Biometrics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Precise Biometrics AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Anoto Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anoto Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Precise Biometrics and Anoto Group

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

The idea behind Precise Biometrics AB and Anoto Group AB 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 CEOs Directory module to screen CEOs from public companies around the world.