Correlation Between Smart Eye and Nekkar Asa
Can any of the company-specific risk be diversified away by investing in both Smart Eye and Nekkar Asa 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 Nekkar Asa 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 Nekkar Asa, you can compare the effects of market volatilities on Smart Eye and Nekkar Asa 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 Nekkar Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Eye and Nekkar Asa.
Diversification Opportunities for Smart Eye and Nekkar Asa
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Smart and Nekkar is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Smart Eye AB and Nekkar Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nekkar Asa 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 Nekkar Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nekkar Asa has no effect on the direction of Smart Eye i.e., Smart Eye and Nekkar Asa go up and down completely randomly.
Pair Corralation between Smart Eye and Nekkar Asa
Assuming the 90 days trading horizon Smart Eye AB is expected to under-perform the Nekkar Asa. In addition to that, Smart Eye is 1.2 times more volatile than Nekkar Asa. It trades about -0.14 of its total potential returns per unit of risk. Nekkar Asa is currently generating about 0.03 per unit of volatility. If you would invest 902.00 in Nekkar Asa on August 28, 2024 and sell it today you would earn a total of 62.00 from holding Nekkar Asa or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Smart Eye AB vs. Nekkar Asa
Performance |
| Timeline |
| Smart Eye AB |
| Nekkar Asa |
Smart Eye and Nekkar Asa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart Eye and Nekkar Asa
The main advantage of trading using opposite Smart Eye and Nekkar Asa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Eye position performs unexpectedly, Nekkar Asa 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 Nekkar Asa will offset losses from the drop in Nekkar Asa's long position.| Smart Eye vs. Lifco AB | Smart Eye vs. Lagercrantz Group AB | Smart Eye vs. Addtech AB | Smart Eye vs. Instalco Intressenter AB |
| Nekkar Asa vs. Carasent ASA | Nekkar Asa vs. 2020 Bulkers | Nekkar Asa vs. Kitron ASA | Nekkar Asa vs. MPC Container Ships |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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