Correlation Between Invisio Communications and Smart Eye
Can any of the company-specific risk be diversified away by investing in both Invisio Communications 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 Invisio Communications and Smart Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invisio Communications AB and Smart Eye AB, you can compare the effects of market volatilities on Invisio Communications 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 Invisio Communications with a short position of Smart Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invisio Communications and Smart Eye.
Diversification Opportunities for Invisio Communications and Smart Eye
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invisio and Smart is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Invisio Communications 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 Invisio Communications 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 Invisio Communications 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 Invisio Communications i.e., Invisio Communications and Smart Eye go up and down completely randomly.
Pair Corralation between Invisio Communications and Smart Eye
Assuming the 90 days trading horizon Invisio Communications AB is expected to generate 0.56 times more return on investment than Smart Eye. However, Invisio Communications AB is 1.78 times less risky than Smart Eye. It trades about 0.12 of its potential returns per unit of risk. Smart Eye AB is currently generating about -0.02 per unit of risk. If you would invest 26,950 in Invisio Communications AB on September 2, 2024 and sell it today you would earn a total of 1,250 from holding Invisio Communications AB or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invisio Communications AB vs. Smart Eye AB
Performance |
| Timeline |
| Invisio Communications |
| Smart Eye AB |
Invisio Communications and Smart Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invisio Communications and Smart Eye
The main advantage of trading using opposite Invisio Communications and Smart Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invisio Communications 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.| Invisio Communications vs. Hexatronic Group AB | Invisio Communications vs. CellaVision AB | Invisio Communications vs. Xvivo Perfusion AB | Invisio Communications vs. Sectra AB |
| Smart Eye vs. Catena Media plc | Smart Eye vs. Kambi Group PLC | Smart Eye vs. Betsson AB | Smart Eye vs. Invisio Communications 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 Stocks Directory module to find actively traded stocks across global markets.
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