Correlation Between Smartoptics Group and Next Biometrics
Can any of the company-specific risk be diversified away by investing in both Smartoptics Group 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 Smartoptics Group and Next Biometrics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smartoptics Group AS and Next Biometrics Group, you can compare the effects of market volatilities on Smartoptics Group 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 Smartoptics Group with a short position of Next Biometrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartoptics Group and Next Biometrics.
Diversification Opportunities for Smartoptics Group and Next Biometrics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smartoptics and Next is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Smartoptics Group AS 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 Smartoptics Group 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 Smartoptics Group AS 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 Smartoptics Group i.e., Smartoptics Group and Next Biometrics go up and down completely randomly.
Pair Corralation between Smartoptics Group and Next Biometrics
Assuming the 90 days trading horizon Smartoptics Group AS is expected to generate 1.07 times more return on investment than Next Biometrics. However, Smartoptics Group is 1.07 times more volatile than Next Biometrics Group. It trades about 0.13 of its potential returns per unit of risk. Next Biometrics Group is currently generating about -0.26 per unit of risk. If you would invest 1,880 in Smartoptics Group AS on August 28, 2025 and sell it today you would earn a total of 720.00 from holding Smartoptics Group AS or generate 38.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartoptics Group AS vs. Next Biometrics Group
Performance |
| Timeline |
| Smartoptics Group |
| Next Biometrics Group |
Smartoptics Group and Next Biometrics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartoptics Group and Next Biometrics
The main advantage of trading using opposite Smartoptics Group and Next Biometrics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartoptics Group 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.| Smartoptics Group vs. Proximar Seafood AS | Smartoptics Group vs. Shelf Drilling | Smartoptics Group vs. Helgeland Sparebank | Smartoptics Group vs. Instabank ASA |
| Next Biometrics vs. Jaeren Sparebank | Next Biometrics vs. Romerike Sparebank | Next Biometrics vs. Aasen Sparebank | Next Biometrics vs. Nordic Mining ASA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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