Correlation Between Smart Eye and Unlimited Travel

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

Diversification Opportunities for Smart Eye and Unlimited Travel

-0.72

Correlation Coefficient

Smart Eye  Unlimited Travel

Pay attention - limited upside

The 3 months correlation between Smart and Unlimited is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Smart Eye AB and Unlimited Travel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unlimited Travel 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 Unlimited Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unlimited Travel has no effect on the direction of Smart Eye i.e., Smart Eye and Unlimited Travel go up and down completely randomly.

Pair Corralation between Smart Eye and Unlimited Travel

Assuming the 90 days trading horizon Smart Eye AB is expected to under-perform the Unlimited Travel. In addition to that, Smart Eye is 1.17 times more volatile than Unlimited Travel Group. It trades about -0.19 of its total potential returns per unit of risk. Unlimited Travel Group is currently generating about 0.06 per unit of volatility. If you would invest  1,280  in Unlimited Travel Group on August 30, 2024 and sell it today you would earn a total of  105.00  from holding Unlimited Travel Group or generate 8.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Smart Eye AB  vs.  Unlimited Travel Group

Smart Eye AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smart Eye AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Unlimited Travel

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Unlimited Travel Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Unlimited Travel may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Smart Eye and Unlimited Travel

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

The idea behind Smart Eye AB and Unlimited Travel Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.