Correlation Between Smart Eye and Biotage AB

Can any of the company-specific risk be diversified away by investing in both Smart Eye and Biotage AB 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 Biotage AB 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 Biotage AB, you can compare the effects of market volatilities on Smart Eye and Biotage AB 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 Biotage AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Eye and Biotage AB.

Diversification Opportunities for Smart Eye and Biotage AB

0.53

Correlation Coefficient

Smart Eye  Biotage AB

Very weak diversification

The 3 months correlation between Smart and Biotage is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Smart Eye AB and Biotage AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotage AB 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 Biotage AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotage AB has no effect on the direction of Smart Eye i.e., Smart Eye and Biotage AB go up and down completely randomly.

Pair Corralation between Smart Eye and Biotage AB

Assuming the 90 days trading horizon Smart Eye AB is expected to generate 14.05 times more return on investment than Biotage AB. However, Smart Eye is 14.05 times more volatile than Biotage AB. It trades about 0.08 of its potential returns per unit of risk. Biotage AB is currently generating about 0.17 per unit of risk. 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 Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Smart Eye AB  vs.  Biotage AB

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.

Biotage AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biotage AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Biotage AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Smart Eye and Biotage AB

The main advantage of trading using opposite Smart Eye and Biotage AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Eye position performs unexpectedly, Biotage AB 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 Biotage AB will offset losses from the drop in Biotage AB's long position.

The idea behind Smart Eye AB and Biotage 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.