Correlation Between BIMobject and Smart Eye

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

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

Diversification Opportunities for BIMobject and Smart Eye

-0.48

Correlation Coefficient

BIMobject  Smart Eye

Very good diversification

The 3 months correlation between BIMobject and Smart is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BIMobject 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 BIMobject 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 BIMobject 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 BIMobject i.e., BIMobject and Smart Eye go up and down completely randomly.

Pair Corralation between BIMobject and Smart Eye

Assuming the 90 days trading horizon BIMobject AB is expected to under-perform the Smart Eye. But the stock apears to be less risky and, when comparing its historical volatility, BIMobject AB is 1.2 times less risky than Smart Eye. The stock trades about -0.11 of its potential returns per unit of risk. The Smart Eye AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,555  in Smart Eye AB on April 23, 2025 and sell it today you would earn a total of  1,025  from holding Smart Eye AB or generate 18.45% return on investment over 90 days.

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

BIMobject AB  vs.  Smart Eye AB

BIMobject AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days BIMobject 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 primary indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Smart Eye AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Smart Eye AB are ranked lower than 8 (%) 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 BIMobject and Smart Eye

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

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.