Correlation Between Smart Eye and Kancera AB
Can any of the company-specific risk be diversified away by investing in both Smart Eye and Kancera AB 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 Kancera AB 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 Kancera AB, you can compare the effects of market volatilities on Smart Eye and Kancera AB 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 Kancera AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Eye and Kancera AB.
Diversification Opportunities for Smart Eye and Kancera AB
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smart and Kancera is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Smart Eye AB and Kancera AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kancera AB 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 Kancera AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kancera AB has no effect on the direction of Smart Eye i.e., Smart Eye and Kancera AB go up and down completely randomly.
Pair Corralation between Smart Eye and Kancera AB
Assuming the 90 days trading horizon Smart Eye AB is expected to generate 0.24 times more return on investment than Kancera AB. However, Smart Eye AB is 4.13 times less risky than Kancera AB. It trades about -0.03 of its potential returns per unit of risk. Kancera AB is currently generating about -0.12 per unit of risk. 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 | 95.65% |
| Values | Daily Returns |
Smart Eye AB vs. Kancera AB
Performance |
| Timeline |
| Smart Eye AB |
| Kancera AB |
Smart Eye and Kancera AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart Eye and Kancera AB
The main advantage of trading using opposite Smart Eye and Kancera AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Eye position performs unexpectedly, Kancera AB 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 Kancera AB will offset losses from the drop in Kancera AB's long position.| Smart Eye vs. White Pearl Technology | Smart Eye vs. TradeDoubler AB | Smart Eye vs. Upsales Technology AB | Smart Eye vs. Scandinavian ChemoTech AB |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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