Correlation Between Paradox Interactive and Fingerprint Cards

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

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

Diversification Opportunities for Paradox Interactive and Fingerprint Cards

0.41

Correlation Coefficient

Paradox Interactive  Fingerprint Cards

Very weak diversification

The 3 months correlation between Paradox and Fingerprint is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Paradox Interactive 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 Paradox Interactive 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 Paradox Interactive 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 Paradox Interactive i.e., Paradox Interactive and Fingerprint Cards go up and down completely randomly.

Pair Corralation between Paradox Interactive and Fingerprint Cards

Assuming the 90 days trading horizon Paradox Interactive AB is expected to generate 0.32 times more return on investment than Fingerprint Cards. However, Paradox Interactive AB is 3.09 times less risky than Fingerprint Cards. It trades about -0.02 of its potential returns per unit of risk. Fingerprint Cards AB is currently generating about -0.11 per unit of risk. If you would invest  18,347  in Paradox Interactive AB on April 25, 2025 and sell it today you would lose (747.00) from holding Paradox Interactive AB or give up 4.07% of portfolio value over 90 days.

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

Paradox Interactive AB  vs.  Fingerprint Cards AB

Paradox Interactive

Risk-Adjusted Performance

Weak

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

Fingerprint Cards

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fingerprint Cards AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Paradox Interactive and Fingerprint Cards

The main advantage of trading using opposite Paradox Interactive and Fingerprint Cards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paradox Interactive 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 Paradox Interactive 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.