Correlation Between Formidable ETF and Robo Global

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

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

Diversification Opportunities for Formidable ETF and Robo Global

-0.32

Correlation Coefficient

Formidable ETF  Robo Global

Very good diversification

The 3 months correlation between Formidable and Robo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Formidable ETF and Robo Global Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robo Global Robotics and Formidable ETF 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 Formidable ETF are associated (or correlated) with Robo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robo Global Robotics has no effect on the direction of Formidable ETF i.e., Formidable ETF and Robo Global go up and down completely randomly.

Pair Corralation between Formidable ETF and Robo Global

Given the investment horizon of 90 days Formidable ETF is expected to under-perform the Robo Global. But the etf apears to be less risky and, when comparing its historical volatility, Formidable ETF is 1.44 times less risky than Robo Global. The etf trades about -0.16 of its potential returns per unit of risk. The Robo Global Robotics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5,518  in Robo Global Robotics on September 21, 2024 and sell it today you would earn a total of  104.00  from holding Robo Global Robotics or generate 1.88% return on investment over 90 days.

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

Formidable ETF  vs.  Robo Global Robotics

Formidable ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Formidable ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Robo Global Robotics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Robo Global Robotics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Robo Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Formidable ETF and Robo Global

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

The idea behind Formidable ETF and Robo Global Robotics 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.