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

0.23

Correlation Coefficient

Smart Eye  Nekkar Asa

Modest diversification

The 3 months correlation between Smart and Nekkar is 0.23. 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 1.19 times more volatile than Nekkar Asa. It trades about -0.12 of its total potential returns per unit of risk. Nekkar Asa is currently generating about -0.02 per unit of volatility. If you would invest  1,025  in Nekkar Asa on September 4, 2024 and sell it today you would lose (45.00) from holding Nekkar Asa or give up 4.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Smart Eye AB  vs.  Nekkar Asa

Smart Eye AB

Risk-Adjusted Performance

0 of 100

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Nekkar Asa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nekkar Asa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Nekkar Asa is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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.

The idea behind Smart Eye AB and Nekkar Asa 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.