Correlation Between Cantargia and Smart Eye
Can any of the company-specific risk be diversified away by investing in both Cantargia 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 Cantargia and Smart Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantargia AB and Smart Eye AB, you can compare the effects of market volatilities on Cantargia 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 Cantargia with a short position of Smart Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Smart Eye.
Diversification Opportunities for Cantargia and Smart Eye
Very poor diversification
The 3 months correlation between Cantargia and Smart is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia 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 Cantargia 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 Cantargia 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 Cantargia i.e., Cantargia and Smart Eye go up and down completely randomly.
Pair Corralation between Cantargia and Smart Eye
Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Smart Eye. In addition to that, Cantargia is 2.42 times more volatile than Smart Eye AB. It trades about -0.23 of its total potential returns per unit of risk. Smart Eye AB is currently generating about -0.16 per unit of volatility. If you would invest 6,590 in Smart Eye AB on August 24, 2024 and sell it today you would lose (770.00) from holding Smart Eye AB or give up 11.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cantargia AB vs. Smart Eye AB
Performance |
| Timeline |
| Cantargia AB |
| Smart Eye AB |
Cantargia and Smart Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantargia and Smart Eye
The main advantage of trading using opposite Cantargia and Smart Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia 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.The idea behind Cantargia AB and Smart Eye 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.| Smart Eye vs. Vitec Software Group | Smart Eye vs. Nitro Games Oyj | Smart Eye vs. Indutrade AB | Smart Eye vs. Beowulf Mining PLC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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