Correlation Between Beowulf Mining and Smart Eye

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

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

Diversification Opportunities for Beowulf Mining and Smart Eye

-0.18

Correlation Coefficient

Beowulf Mining  Smart Eye

Good diversification

The 3 months correlation between Beowulf and Smart is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Beowulf Mining PLC 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 Beowulf Mining 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 Beowulf Mining PLC 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 Beowulf Mining i.e., Beowulf Mining and Smart Eye go up and down completely randomly.

Pair Corralation between Beowulf Mining and Smart Eye

Assuming the 90 days trading horizon Beowulf Mining PLC is expected to under-perform the Smart Eye. In addition to that, Beowulf Mining is 1.03 times more volatile than Smart Eye AB. It trades about -0.02 of its total potential returns per unit of risk. Smart Eye AB is currently generating about 0.08 per unit of volatility. If you would invest  5,700  in Smart Eye AB on April 24, 2025 and sell it today you would earn a total of  760.00  from holding Smart Eye AB or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Beowulf Mining PLC  vs.  Smart Eye AB

Beowulf Mining PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beowulf Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Beowulf Mining is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Smart Eye AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Smart Eye AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Smart Eye unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Beowulf Mining and Smart Eye

The main advantage of trading using opposite Beowulf Mining and Smart Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beowulf Mining 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 Beowulf Mining PLC 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.