Correlation Between Esfera Robotics and JPM America

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

Diversification Opportunities for Esfera Robotics and JPM America

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Esfera and JPM is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and JPM America Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM America Equity 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 JPM America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM America Equity has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and JPM America go up and down completely randomly.

Pair Corralation between Esfera Robotics and JPM America

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 0.98 times more return on investment than JPM America. However, Esfera Robotics R is 1.02 times less risky than JPM America. It trades about 0.33 of its potential returns per unit of risk. JPM America Equity is currently generating about 0.23 per unit of risk. If you would invest  28,305  in Esfera Robotics R on September 6, 2024 and sell it today you would earn a total of  7,153  from holding Esfera Robotics R or generate 25.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy98.44%
ValuesDaily Returns

Esfera Robotics R  vs.  JPM America Equity

 Performance 
       Timeline  
Esfera Robotics R 

Risk-Adjusted Performance

25 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Esfera Robotics sustained solid returns over the last few months and may actually be approaching a breakup point.
JPM America Equity 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in JPM America Equity are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather fragile technical and fundamental indicators, JPM America exhibited solid returns over the last few months and may actually be approaching a breakup point.

Esfera Robotics and JPM America Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Esfera Robotics and JPM America

The main advantage of trading using opposite Esfera Robotics and JPM America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esfera Robotics position performs unexpectedly, JPM America 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 JPM America will offset losses from the drop in JPM America's long position.
The idea behind Esfera Robotics R and JPM America Equity 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.
Check out your portfolio center.
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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