Correlation Between BEKA LUX and Esfera Robotics

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

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

Diversification Opportunities for BEKA LUX and Esfera Robotics

0.78

Correlation Coefficient

BEKA LUX  Esfera Robotics

Poor diversification

The 3 months correlation between BEKA and Esfera is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BEKA LUX SICAV 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 BEKA LUX 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 BEKA LUX SICAV 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 BEKA LUX i.e., BEKA LUX and Esfera Robotics go up and down completely randomly.

Pair Corralation between BEKA LUX and Esfera Robotics

Assuming the 90 days trading horizon BEKA LUX is expected to generate 7.84 times less return on investment than Esfera Robotics. But when comparing it to its historical volatility, BEKA LUX SICAV is 4.68 times less risky than Esfera Robotics. It trades about 0.06 of its potential returns per unit of risk. Esfera Robotics R is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  28,393  in Esfera Robotics R on September 11, 2024 and sell it today you would earn a total of  7,338  from holding Esfera Robotics R or generate 25.84% return on investment over 90 days.

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

BEKA LUX SICAV  vs.  Esfera Robotics R

BEKA LUX SICAV

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BEKA LUX SICAV are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, BEKA LUX 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

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 22 (%) 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 BEKA LUX and Esfera Robotics

The main advantage of trading using opposite BEKA LUX and Esfera Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEKA LUX 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 BEKA LUX SICAV 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.