Correlation Between Naranja Standard and Esfera Robotics

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

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

Diversification Opportunities for Naranja Standard and Esfera Robotics

0.61

Correlation Coefficient

Naranja Standard  Esfera Robotics

Poor diversification

The 3 months correlation between Naranja and Esfera is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Naranja Standard Poors 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 Naranja Standard 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 Naranja Standard Poors 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 Naranja Standard i.e., Naranja Standard and Esfera Robotics go up and down completely randomly.

Pair Corralation between Naranja Standard and Esfera Robotics

Assuming the 90 days trading horizon Naranja Standard Poors is expected to under-perform the Esfera Robotics. But the fund apears to be less risky and, when comparing its historical volatility, Naranja Standard Poors is 1.23 times less risky than Esfera Robotics. The fund trades about -0.11 of its potential returns per unit of risk. The Esfera Robotics R is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  35,731  in Esfera Robotics R on October 6, 2024 and sell it today you would lose (296.00) from holding Esfera Robotics R or give up 0.83% of portfolio value over 90 days.

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

Naranja Standard Poors  vs.  Esfera Robotics R

Naranja Standard Poors

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Naranja Standard Poors has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat fragile basic indicators, Naranja Standard may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Esfera Robotics R

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Esfera Robotics R has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat unsteady basic indicators, Esfera Robotics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Naranja Standard and Esfera Robotics

The main advantage of trading using opposite Naranja Standard and Esfera Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naranja Standard 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 Naranja Standard Poors 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .