Correlation Between Amundi Label and Esfera Robotics

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

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

Diversification Opportunities for Amundi Label and Esfera Robotics

-0.12

Correlation Coefficient

Amundi Label  Esfera Robotics

Good diversification

The 3 months correlation between Amundi and Esfera is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Label Equilibre 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 Amundi Label 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 Amundi Label Equilibre 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 Amundi Label i.e., Amundi Label and Esfera Robotics go up and down completely randomly.

Pair Corralation between Amundi Label and Esfera Robotics

Assuming the 90 days trading horizon Amundi Label is expected to generate 5.09 times less return on investment than Esfera Robotics. But when comparing it to its historical volatility, Amundi Label Equilibre is 2.86 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 0.1 of returns per unit of risk over similar time horizon. If you would invest  21,152  in Esfera Robotics R on October 5, 2024 and sell it today you would earn a total of  14,283  from holding Esfera Robotics R or generate 67.53% return on investment over 90 days.

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

Amundi Label Equilibre  vs.  Esfera Robotics R

Amundi Label Equilibre

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi Label Equilibre has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Amundi Label is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 weak basic indicators, Esfera Robotics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amundi Label and Esfera Robotics

The main advantage of trading using opposite Amundi Label and Esfera Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Label 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 Amundi Label Equilibre 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.