Correlation Between Bavarian Nordic and Precise Biometrics

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

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

Diversification Opportunities for Bavarian Nordic and Precise Biometrics

-0.64

Correlation Coefficient

Bavarian Nordic  Precise Biometrics

Excellent diversification

The 3 months correlation between Bavarian and Precise is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Precise Biometrics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precise Biometrics and Bavarian Nordic 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 Bavarian Nordic are associated (or correlated) with Precise Biometrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precise Biometrics has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Precise Biometrics go up and down completely randomly.

Pair Corralation between Bavarian Nordic and Precise Biometrics

Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 0.55 times more return on investment than Precise Biometrics. However, Bavarian Nordic is 1.82 times less risky than Precise Biometrics. It trades about 0.19 of its potential returns per unit of risk. Precise Biometrics AB is currently generating about -0.14 per unit of risk. If you would invest  15,255  in Bavarian Nordic on April 24, 2025 and sell it today you would earn a total of  3,290  from holding Bavarian Nordic or generate 21.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Bavarian Nordic  vs.  Precise Biometrics AB

Bavarian Nordic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bavarian Nordic are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Bavarian Nordic displayed solid returns over the last few months and may actually be approaching a breakup point.

Precise Biometrics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Precise Biometrics AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bavarian Nordic and Precise Biometrics

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

The idea behind Bavarian Nordic and Precise Biometrics 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.