Correlation Between Kneat and Smart Eye

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

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

Diversification Opportunities for Kneat and Smart Eye

-0.02

Correlation Coefficient

Kneat  Smart Eye

Good diversification

The 3 months correlation between Kneat and Smart is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kneat Inc 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 Kneat 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 Kneat Inc 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 Kneat i.e., Kneat and Smart Eye go up and down completely randomly.

Pair Corralation between Kneat and Smart Eye

Assuming the 90 days trading horizon Kneat Inc is expected to under-perform the Smart Eye. But the stock apears to be less risky and, when comparing its historical volatility, Kneat Inc is 1.56 times less risky than Smart Eye. The stock trades about 0.0 of its potential returns per unit of risk. The Smart Eye AB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  5,380  in Smart Eye AB on April 20, 2025 and sell it today you would earn a total of  1,210  from holding Smart Eye AB or generate 22.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Kneat Inc  vs.  Smart Eye AB

Kneat Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kneat Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Kneat is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the 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 9 (%) 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 Kneat and Smart Eye

The main advantage of trading using opposite Kneat and Smart Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kneat 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 Kneat Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.