Correlation Between IDEX Biometrics and Kaspien Holdings

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

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

Diversification Opportunities for IDEX Biometrics and Kaspien Holdings

0.02

Correlation Coefficient

IDEX Biometrics  Kaspien Holdings

Significant diversification

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

Pair Corralation between IDEX Biometrics and Kaspien Holdings

If you would invest  25.00  in Kaspien Holdings on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Kaspien Holdings or generate 0.0% return on investment over 90 days.

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

IDEX Biometrics ASA  vs.  Kaspien Holdings

IDEX Biometrics ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IDEX Biometrics ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IDEX Biometrics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Kaspien Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaspien Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Kaspien Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IDEX Biometrics and Kaspien Holdings

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

The idea behind IDEX Biometrics ASA and Kaspien Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.