Correlation Between Precise Biometrics and Fingerprint Cards

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

Diversification Opportunities for Precise Biometrics and Fingerprint Cards

0.02

Correlation Coefficient

Precise Biometrics  Fingerprint Cards

Significant diversification

The 3 months correlation between Precise and Fingerprint is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Precise Biometrics AB and Fingerprint Cards AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fingerprint Cards 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 Fingerprint Cards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fingerprint Cards has no effect on the direction of Precise Biometrics i.e., Precise Biometrics and Fingerprint Cards go up and down completely randomly.

Pair Corralation between Precise Biometrics and Fingerprint Cards

Assuming the 90 days trading horizon Precise Biometrics is expected to generate 1.17 times less return on investment than Fingerprint Cards. But when comparing it to its historical volatility, Precise Biometrics AB is 1.44 times less risky than Fingerprint Cards. It trades about 0.12 of its potential returns per unit of risk. Fingerprint Cards AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5.55  in Fingerprint Cards AB on September 2, 2024 and sell it today you would earn a total of  2.46  from holding Fingerprint Cards AB or generate 44.32% return on investment over 90 days.

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

Precise Biometrics AB  vs.  Fingerprint Cards AB

Precise Biometrics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Precise Biometrics AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Precise Biometrics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fingerprint Cards

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fingerprint Cards AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Fingerprint Cards sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Precise Biometrics and Fingerprint Cards

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

The idea behind Precise Biometrics AB and Fingerprint Cards 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.