Correlation Between Frontline and Next Biometrics
Can any of the company-specific risk be diversified away by investing in both Frontline and Next Biometrics 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 Frontline and Next Biometrics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontline and Next Biometrics Group, you can compare the effects of market volatilities on Frontline and Next Biometrics 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 Frontline with a short position of Next Biometrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontline and Next Biometrics.
Diversification Opportunities for Frontline and Next Biometrics
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Frontline and Next is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Frontline and Next Biometrics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Biometrics Group and Frontline 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 Frontline are associated (or correlated) with Next Biometrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Biometrics Group has no effect on the direction of Frontline i.e., Frontline and Next Biometrics go up and down completely randomly.
Pair Corralation between Frontline and Next Biometrics
Assuming the 90 days trading horizon Frontline is expected to generate 0.53 times more return on investment than Next Biometrics. However, Frontline is 1.9 times less risky than Next Biometrics. It trades about 0.13 of its potential returns per unit of risk. Next Biometrics Group is currently generating about -0.28 per unit of risk. If you would invest 20,329 in Frontline on August 31, 2025 and sell it today you would earn a total of 3,871 from holding Frontline or generate 19.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontline vs. Next Biometrics Group
Performance |
| Timeline |
| Frontline |
| Next Biometrics Group |
Frontline and Next Biometrics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontline and Next Biometrics
The main advantage of trading using opposite Frontline and Next Biometrics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontline position performs unexpectedly, Next Biometrics 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 Next Biometrics will offset losses from the drop in Next Biometrics' long position.| Frontline vs. Bien Sparebank ASA | Frontline vs. Lokotech Group AS | Frontline vs. Napatech AS | Frontline vs. Soiltech ASA |
| Next Biometrics vs. Goodtech | Next Biometrics vs. Thor Medical ASA | Next Biometrics vs. Proximar Seafood AS | Next Biometrics vs. Odfjell Drilling |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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