Correlation Between Esfera Robotics and IE00B0H4TS55

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

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

Diversification Opportunities for Esfera Robotics and IE00B0H4TS55

-0.72

Correlation Coefficient

Esfera Robotics  IE00B0H4TS55

Pay attention - limited upside

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

Pair Corralation between Esfera Robotics and IE00B0H4TS55

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 5.24 times more return on investment than IE00B0H4TS55. However, Esfera Robotics is 5.24 times more volatile than IE00B0H4TS55. It trades about 0.31 of its potential returns per unit of risk. IE00B0H4TS55 is currently generating about -0.06 per unit of risk. 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

Esfera Robotics R  vs.  IE00B0H4TS55

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.

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.

Pair Trading with Esfera Robotics and IE00B0H4TS55

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

The idea behind Esfera Robotics R and IE00B0H4TS55 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.