Correlation Between NOTE AB and Fingerprint Cards

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

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

Diversification Opportunities for NOTE AB and Fingerprint Cards

-0.24

Correlation Coefficient

NOTE AB  Fingerprint Cards

Very good diversification

The 3 months correlation between NOTE and Fingerprint is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding NOTE 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 NOTE AB 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 NOTE 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 NOTE AB i.e., NOTE AB and Fingerprint Cards go up and down completely randomly.

Pair Corralation between NOTE AB and Fingerprint Cards

Assuming the 90 days trading horizon NOTE AB is expected to generate 0.31 times more return on investment than Fingerprint Cards. However, NOTE AB is 3.19 times less risky than Fingerprint Cards. It trades about -0.01 of its potential returns per unit of risk. Fingerprint Cards AB is currently generating about -0.04 per unit of risk. If you would invest  17,460  in NOTE AB on September 2, 2024 and sell it today you would lose (4,560) from holding NOTE AB or give up 26.12% of portfolio value over 90 days.

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

NOTE AB  vs.  Fingerprint Cards AB

NOTE AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOTE AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, NOTE AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 NOTE AB and Fingerprint Cards

The main advantage of trading using opposite NOTE AB and Fingerprint Cards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOTE AB 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 NOTE 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.