Correlation Between Smart Eye and Waystream Holding
Can any of the company-specific risk be diversified away by investing in both Smart Eye and Waystream Holding 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 Waystream Holding 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 Waystream Holding AB, you can compare the effects of market volatilities on Smart Eye and Waystream Holding 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 Waystream Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Eye and Waystream Holding.
Diversification Opportunities for Smart Eye and Waystream Holding
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smart and Waystream is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Smart Eye AB and Waystream Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waystream Holding 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 Waystream Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waystream Holding has no effect on the direction of Smart Eye i.e., Smart Eye and Waystream Holding go up and down completely randomly.
Pair Corralation between Smart Eye and Waystream Holding
Assuming the 90 days trading horizon Smart Eye AB is expected to generate 0.57 times more return on investment than Waystream Holding. However, Smart Eye AB is 1.75 times less risky than Waystream Holding. It trades about -0.13 of its potential returns per unit of risk. Waystream Holding AB is currently generating about -0.16 per unit of risk. If you would invest 6,700 in Smart Eye AB on August 31, 2024 and sell it today you would lose (670.00) from holding Smart Eye AB or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smart Eye AB vs. Waystream Holding AB
Performance |
| Timeline |
| Smart Eye AB |
| Waystream Holding |
Smart Eye and Waystream Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart Eye and Waystream Holding
The main advantage of trading using opposite Smart Eye and Waystream Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Eye position performs unexpectedly, Waystream Holding 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 Waystream Holding will offset losses from the drop in Waystream Holding's long position.| Smart Eye vs. Catena Media plc | Smart Eye vs. Kambi Group PLC | Smart Eye vs. Betsson AB | Smart Eye vs. Invisio Communications AB |
| Waystream Holding vs. Hexatronic Group AB | Waystream Holding vs. Smart Eye AB | Waystream Holding vs. Prevas AB | Waystream Holding vs. G5 Entertainment publ |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |