Correlation Between BICO Group and Smart Eye
Can any of the company-specific risk be diversified away by investing in both BICO Group 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 BICO Group and Smart Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BICO Group AB and Smart Eye AB, you can compare the effects of market volatilities on BICO Group 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 BICO Group with a short position of Smart Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICO Group and Smart Eye.
Diversification Opportunities for BICO Group and Smart Eye
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BICO and Smart is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BICO Group 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 BICO 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 BICO Group 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 BICO Group i.e., BICO Group and Smart Eye go up and down completely randomly.
Pair Corralation between BICO Group and Smart Eye
Assuming the 90 days trading horizon BICO Group AB is expected to under-perform the Smart Eye. In addition to that, BICO Group is 1.86 times more volatile than Smart Eye AB. It trades about -0.08 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BICO Group AB vs. Smart Eye AB
Performance |
| Timeline |
| BICO Group AB |
| Smart Eye AB |
BICO Group and Smart Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BICO Group and Smart Eye
The main advantage of trading using opposite BICO Group and Smart Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICO Group 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.| BICO Group vs. Xvivo Perfusion AB | BICO Group vs. Bactiguard Holding AB | BICO Group vs. Stille AB | BICO Group vs. SpectraCure 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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