Correlation Between Svenska Handelsbanken and Smart Eye
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken 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 Svenska Handelsbanken and Smart Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken AB and Smart Eye AB, you can compare the effects of market volatilities on Svenska Handelsbanken 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 Svenska Handelsbanken with a short position of Smart Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Smart Eye.
Diversification Opportunities for Svenska Handelsbanken and Smart Eye
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Svenska and Smart is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken 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 Svenska Handelsbanken 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 Svenska Handelsbanken 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 Svenska Handelsbanken i.e., Svenska Handelsbanken and Smart Eye go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Smart Eye
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to under-perform the Smart Eye. But the stock apears to be less risky and, when comparing its historical volatility, Svenska Handelsbanken AB is 3.82 times less risky than Smart Eye. The stock trades about -0.07 of its potential returns per unit of risk. The Smart Eye AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,200 in Smart Eye AB on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Smart Eye AB or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Smart Eye AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| Smart Eye AB |
Svenska Handelsbanken and Smart Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Smart Eye
The main advantage of trading using opposite Svenska Handelsbanken and Smart Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken 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.| Svenska Handelsbanken vs. Svenska Handelsbanken AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Atlas Copco AB | Svenska Handelsbanken vs. Skandinaviska Enskilda Banken |
| Smart Eye vs. Svenska Handelsbanken AB | Smart Eye vs. Bio Works Technologies AB | Smart Eye vs. Upsales Technology AB | Smart Eye vs. FormPipe Software 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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