Correlation Between Fingerprint Cards and Smart Eye

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

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

Diversification Opportunities for Fingerprint Cards and Smart Eye

-0.5

Correlation Coefficient

Fingerprint Cards  Smart Eye

Very good diversification

The 3 months correlation between Fingerprint and Smart is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fingerprint Cards 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 Fingerprint Cards 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 Fingerprint Cards 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 Fingerprint Cards i.e., Fingerprint Cards and Smart Eye go up and down completely randomly.

Pair Corralation between Fingerprint Cards and Smart Eye

Assuming the 90 days trading horizon Fingerprint Cards AB is expected to under-perform the Smart Eye. In addition to that, Fingerprint Cards is 2.23 times more volatile than Smart Eye AB. It trades about -0.03 of its total potential returns per unit of risk. Smart Eye AB is currently generating about 0.1 per unit of volatility. 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

Fingerprint Cards AB  vs.  Smart Eye AB

Fingerprint Cards

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fingerprint Cards AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company 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 Fingerprint Cards and Smart Eye

The main advantage of trading using opposite Fingerprint Cards and Smart Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fingerprint Cards 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 Fingerprint Cards 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.