Correlation Between Nekkar Asa and Smart Eye

Can any of the company-specific risk be diversified away by investing in both Nekkar Asa 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 Nekkar Asa and Smart Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nekkar Asa and Smart Eye AB, you can compare the effects of market volatilities on Nekkar Asa 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 Nekkar Asa with a short position of Smart Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nekkar Asa and Smart Eye.

Diversification Opportunities for Nekkar Asa and Smart Eye

-0.14

Correlation Coefficient

Nekkar Asa  Smart Eye

Good diversification

The 3 months correlation between Nekkar and Smart is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nekkar Asa 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 Nekkar Asa 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 Nekkar Asa 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 Nekkar Asa i.e., Nekkar Asa and Smart Eye go up and down completely randomly.

Pair Corralation between Nekkar Asa and Smart Eye

Assuming the 90 days trading horizon Nekkar Asa is expected to generate 0.38 times more return on investment than Smart Eye. However, Nekkar Asa is 2.61 times less risky than Smart Eye. It trades about 0.15 of its potential returns per unit of risk. Smart Eye AB is currently generating about -0.07 per unit of risk. If you would invest  1,005  in Nekkar Asa on December 30, 2024 and sell it today you would earn a total of  165.00  from holding Nekkar Asa or generate 16.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Nekkar Asa  vs.  Smart Eye AB

Nekkar Asa

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nekkar Asa are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Nekkar Asa disclosed solid returns over the last few months and may actually be approaching a breakup point.

Smart Eye AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smart Eye AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Nekkar Asa and Smart Eye

The main advantage of trading using opposite Nekkar Asa and Smart Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nekkar Asa 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.

The idea behind Nekkar Asa and Smart Eye AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.