Correlation Between Smart Eye and Arcticzymes Technologies
Can any of the company-specific risk be diversified away by investing in both Smart Eye and Arcticzymes Technologies 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 Smart Eye and Arcticzymes Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smart Eye AB and Arcticzymes Technologies ASA, you can compare the effects of market volatilities on Smart Eye and Arcticzymes Technologies 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 Smart Eye with a short position of Arcticzymes Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Eye and Arcticzymes Technologies.
Diversification Opportunities for Smart Eye and Arcticzymes Technologies
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Smart and Arcticzymes is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Smart Eye AB and Arcticzymes Technologies ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcticzymes Technologies and Smart Eye 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 Smart Eye AB are associated (or correlated) with Arcticzymes Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcticzymes Technologies has no effect on the direction of Smart Eye i.e., Smart Eye and Arcticzymes Technologies go up and down completely randomly.
Pair Corralation between Smart Eye and Arcticzymes Technologies
Assuming the 90 days trading horizon Smart Eye AB is expected to generate 0.96 times more return on investment than Arcticzymes Technologies. However, Smart Eye AB is 1.04 times less risky than Arcticzymes Technologies. It trades about -0.14 of its potential returns per unit of risk. Arcticzymes Technologies ASA is currently generating about -0.13 per unit of risk. If you would invest 10,920 in Smart Eye AB on August 28, 2024 and sell it today you would lose (4,780) from holding Smart Eye AB or give up 43.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.45% |
| Values | Daily Returns |
Smart Eye AB vs. Arcticzymes Technologies ASA
Performance |
| Timeline |
| Smart Eye AB |
| Arcticzymes Technologies |
Smart Eye and Arcticzymes Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart Eye and Arcticzymes Technologies
The main advantage of trading using opposite Smart Eye and Arcticzymes Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Eye position performs unexpectedly, Arcticzymes Technologies 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 Arcticzymes Technologies will offset losses from the drop in Arcticzymes Technologies' long position.| Smart Eye vs. Lifco AB | Smart Eye vs. Lagercrantz Group AB | Smart Eye vs. Addtech AB | Smart Eye vs. Instalco Intressenter AB |
| Arcticzymes Technologies vs. Carasent ASA | Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies vs. Kitron ASA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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