Correlation Between Smart Eye and Zaplox AB

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

Diversification Opportunities for Smart Eye and Zaplox AB

-0.53

Correlation Coefficient

Smart Eye  Zaplox AB

Excellent diversification

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

Pair Corralation between Smart Eye and Zaplox AB

Assuming the 90 days trading horizon Smart Eye AB is expected to generate 0.52 times more return on investment than Zaplox AB. However, Smart Eye AB is 1.91 times less risky than Zaplox AB. It trades about 0.09 of its potential returns per unit of risk. Zaplox AB is currently generating about -0.02 per unit of risk. If you would invest  5,715  in Smart Eye AB on April 25, 2025 and sell it today you would earn a total of  935.00  from holding Smart Eye AB or generate 16.36% return on investment over 90 days.

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

Smart Eye AB  vs.  Zaplox AB

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 7 (%) 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.

Zaplox AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zaplox 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.

Pair Trading with Smart Eye and Zaplox AB

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

The idea behind Smart Eye AB and Zaplox 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .