Correlation Between IE00B0H4TS55 and Esfera Robotics

Can any of the company-specific risk be diversified away by investing in both IE00B0H4TS55 and Esfera Robotics 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 IE00B0H4TS55 and Esfera Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IE00B0H4TS55 and Esfera Robotics R, you can compare the effects of market volatilities on IE00B0H4TS55 and Esfera Robotics 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 IE00B0H4TS55 with a short position of Esfera Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IE00B0H4TS55 and Esfera Robotics.

Diversification Opportunities for IE00B0H4TS55 and Esfera Robotics

-0.72

Correlation Coefficient

IE00B0H4TS55  Esfera Robotics

Pay attention - limited upside

The 3 months correlation between IE00B0H4TS55 and Esfera is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding IE00B0H4TS55 and Esfera Robotics R in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esfera Robotics R and IE00B0H4TS55 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 IE00B0H4TS55 are associated (or correlated) with Esfera Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esfera Robotics R has no effect on the direction of IE00B0H4TS55 i.e., IE00B0H4TS55 and Esfera Robotics go up and down completely randomly.

Pair Corralation between IE00B0H4TS55 and Esfera Robotics

Assuming the 90 days trading horizon IE00B0H4TS55 is expected to under-perform the Esfera Robotics. But the fund apears to be less risky and, when comparing its historical volatility, IE00B0H4TS55 is 5.24 times less risky than Esfera Robotics. The fund trades about -0.06 of its potential returns per unit of risk. The Esfera Robotics R is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  28,896  in Esfera Robotics R on September 7, 2024 and sell it today you would earn a total of  6,562  from holding Esfera Robotics R or generate 22.71% return on investment over 90 days.

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

IE00B0H4TS55  vs.  Esfera Robotics R

IE00B0H4TS55

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IE00B0H4TS55 has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, IE00B0H4TS55 is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Esfera Robotics R

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat fragile basic indicators, Esfera Robotics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IE00B0H4TS55 and Esfera Robotics

The main advantage of trading using opposite IE00B0H4TS55 and Esfera Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IE00B0H4TS55 position performs unexpectedly, Esfera Robotics 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 Esfera Robotics will offset losses from the drop in Esfera Robotics' long position.

The idea behind IE00B0H4TS55 and Esfera Robotics R 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.