Correlation Between Fingerprint Cards and Spectrumone Publ

Can any of the company-specific risk be diversified away by investing in both Fingerprint Cards and Spectrumone Publ 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 Fingerprint Cards and Spectrumone Publ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fingerprint Cards AB and Spectrumone publ AB, you can compare the effects of market volatilities on Fingerprint Cards and Spectrumone Publ 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 Fingerprint Cards with a short position of Spectrumone Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fingerprint Cards and Spectrumone Publ.

Diversification Opportunities for Fingerprint Cards and Spectrumone Publ

-0.93

Correlation Coefficient

Fingerprint Cards  Spectrumone Publ

Pay attention - limited upside

The 3 months correlation between Fingerprint and Spectrumone is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fingerprint Cards AB and Spectrumone publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrumone publ and Fingerprint Cards 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 Fingerprint Cards AB are associated (or correlated) with Spectrumone Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrumone publ has no effect on the direction of Fingerprint Cards i.e., Fingerprint Cards and Spectrumone Publ go up and down completely randomly.

Pair Corralation between Fingerprint Cards and Spectrumone Publ

Assuming the 90 days trading horizon Fingerprint Cards AB is expected to generate 4.02 times more return on investment than Spectrumone Publ. However, Fingerprint Cards is 4.02 times more volatile than Spectrumone publ AB. It trades about 0.07 of its potential returns per unit of risk. Spectrumone publ AB is currently generating about -0.13 per unit of risk. If you would invest  12.00  in Fingerprint Cards AB on March 29, 2024 and sell it today you would earn a total of  0.00  from holding Fingerprint Cards AB or generate 0.0% return on investment over 90 days.

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

Fingerprint Cards AB  vs.  Spectrumone publ AB

Fingerprint Cards

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fingerprint Cards AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Spectrumone publ

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spectrumone publ AB are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Spectrumone Publ sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fingerprint Cards and Spectrumone Publ

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

The idea behind Fingerprint Cards AB and Spectrumone publ 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.

Check out your portfolio center.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.