Correlation Between Arbe Robotics and Arax Holdings

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Can any of the company-specific risk be diversified away by investing in both Arbe Robotics and Arax Holdings 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 Arbe Robotics and Arax Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbe Robotics Ltd and Arax Holdings Corp, you can compare the effects of market volatilities on Arbe Robotics and Arax Holdings 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 Arbe Robotics with a short position of Arax Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbe Robotics and Arax Holdings.

Diversification Opportunities for Arbe Robotics and Arax Holdings

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Arbe and Arax is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Arbe Robotics Ltd and Arax Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arax Holdings Corp and Arbe 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 Arbe Robotics Ltd are associated (or correlated) with Arax Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arax Holdings Corp has no effect on the direction of Arbe Robotics i.e., Arbe Robotics and Arax Holdings go up and down completely randomly.

Pair Corralation between Arbe Robotics and Arax Holdings

Assuming the 90 days horizon Arbe Robotics Ltd is expected to generate 14.17 times more return on investment than Arax Holdings. However, Arbe Robotics is 14.17 times more volatile than Arax Holdings Corp. It trades about 0.14 of its potential returns per unit of risk. Arax Holdings Corp is currently generating about -0.03 per unit of risk. If you would invest  0.00  in Arbe Robotics Ltd on September 5, 2024 and sell it today you would earn a total of  15.00  from holding Arbe Robotics Ltd or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy82.81%
ValuesDaily Returns

Arbe Robotics Ltd  vs.  Arax Holdings Corp

 Performance 
       Timeline  
Arbe Robotics 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Arbe Robotics Ltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Arbe Robotics showed solid returns over the last few months and may actually be approaching a breakup point.
Arax Holdings Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Arax Holdings Corp 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Arbe Robotics and Arax Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arbe Robotics and Arax Holdings

The main advantage of trading using opposite Arbe Robotics and Arax Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbe Robotics position performs unexpectedly, Arax Holdings 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 Arax Holdings will offset losses from the drop in Arax Holdings' long position.
The idea behind Arbe Robotics Ltd and Arax Holdings Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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