Correlation Between Next Biometrics and EverfuelAS

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

Diversification Opportunities for Next Biometrics and EverfuelAS

0.51

Correlation Coefficient

Next Biometrics  EverfuelAS

Very weak diversification

The 3 months correlation between Next and EverfuelAS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Next Biometrics Group and EverfuelAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EverfuelAS 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 EverfuelAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EverfuelAS has no effect on the direction of Next Biometrics i.e., Next Biometrics and EverfuelAS go up and down completely randomly.

Pair Corralation between Next Biometrics and EverfuelAS

Assuming the 90 days trading horizon Next Biometrics Group is expected to under-perform the EverfuelAS. But the stock apears to be less risky and, when comparing its historical volatility, Next Biometrics Group is 11.73 times less risky than EverfuelAS. The stock trades about -0.22 of its potential returns per unit of risk. The EverfuelAS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  880.00  in EverfuelAS on January 29, 2024 and sell it today you would earn a total of  130.00  from holding EverfuelAS or generate 14.77% return on investment over 90 days.

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

Next Biometrics Group  vs.  EverfuelAS

Next Biometrics Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Next Biometrics Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Next Biometrics may actually be approaching a critical reversion point that can send shares even higher in May 2024.

EverfuelAS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EverfuelAS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, EverfuelAS displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Next Biometrics and EverfuelAS

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

The idea behind Next Biometrics Group and EverfuelAS 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.