Correlation Between Precise Biometrics and Firefly AB

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

Diversification Opportunities for Precise Biometrics and Firefly AB

-0.38

Correlation Coefficient

Precise Biometrics  Firefly AB

Very good diversification

The 3 months correlation between Precise and Firefly is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Precise Biometrics AB and Firefly AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firefly 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 Firefly AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firefly AB has no effect on the direction of Precise Biometrics i.e., Precise Biometrics and Firefly AB go up and down completely randomly.

Pair Corralation between Precise Biometrics and Firefly AB

Assuming the 90 days trading horizon Precise Biometrics AB is expected to generate 2.86 times more return on investment than Firefly AB. However, Precise Biometrics is 2.86 times more volatile than Firefly AB. It trades about 0.01 of its potential returns per unit of risk. Firefly AB is currently generating about -0.02 per unit of risk. If you would invest  670.00  in Precise Biometrics AB on October 10, 2024 and sell it today you would lose (118.00) from holding Precise Biometrics AB or give up 17.61% of portfolio value over 90 days.

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

Precise Biometrics AB  vs.  Firefly AB

Precise Biometrics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Precise Biometrics AB are ranked lower than 8 (%) 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.

Firefly AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Firefly AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Firefly AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Precise Biometrics and Firefly AB

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

The idea behind Precise Biometrics AB and Firefly 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.