Correlation Between AroCell AB and Smart Eye
Can any of the company-specific risk be diversified away by investing in both AroCell AB and Smart Eye 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 AroCell AB and Smart Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AroCell AB and Smart Eye AB, you can compare the effects of market volatilities on AroCell AB and Smart Eye 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 AroCell AB with a short position of Smart Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of AroCell AB and Smart Eye.
Diversification Opportunities for AroCell AB and Smart Eye
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AroCell and Smart is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AroCell AB and Smart Eye AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Eye AB and AroCell 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 AroCell AB are associated (or correlated) with Smart Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Eye AB has no effect on the direction of AroCell AB i.e., AroCell AB and Smart Eye go up and down completely randomly.
Pair Corralation between AroCell AB and Smart Eye
Assuming the 90 days trading horizon AroCell AB is expected to under-perform the Smart Eye. In addition to that, AroCell AB is 1.15 times more volatile than Smart Eye AB. It trades about -0.24 of its total potential returns per unit of risk. Smart Eye AB is currently generating about -0.03 per unit of volatility. If you would invest 6,460 in Smart Eye AB on September 1, 2024 and sell it today you would lose (210.00) from holding Smart Eye AB or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AroCell AB vs. Smart Eye AB
Performance |
| Timeline |
| AroCell AB |
| Smart Eye AB |
AroCell AB and Smart Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AroCell AB and Smart Eye
The main advantage of trading using opposite AroCell AB and Smart Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AroCell AB position performs unexpectedly, Smart Eye 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 Smart Eye will offset losses from the drop in Smart Eye's long position.| AroCell AB vs. Smart Eye AB | AroCell AB vs. Genovis AB | AroCell AB vs. Kancera AB | AroCell AB vs. Zignsec AB |
| Smart Eye vs. White Pearl Technology | Smart Eye vs. TradeDoubler AB | Smart Eye vs. Upsales Technology AB | Smart Eye vs. Scandinavian ChemoTech AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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