Correlation Between BNP Paribas and Esfera Robotics

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

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

Diversification Opportunities for BNP Paribas and Esfera Robotics

-0.86

Correlation Coefficient

BNP Paribas  Esfera Robotics

Pay attention - limited upside

The 3 months correlation between BNP and Esfera is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Midcap 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 BNP Paribas 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 BNP Paribas Midcap 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 BNP Paribas i.e., BNP Paribas and Esfera Robotics go up and down completely randomly.

Pair Corralation between BNP Paribas and Esfera Robotics

Assuming the 90 days trading horizon BNP Paribas Midcap is expected to under-perform the Esfera Robotics. But the fund apears to be less risky and, when comparing its historical volatility, BNP Paribas Midcap is 1.45 times less risky than Esfera Robotics. The fund trades about -0.03 of its potential returns per unit of risk. The Esfera Robotics R is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  30,636  in Esfera Robotics R on September 23, 2024 and sell it today you would earn a total of  4,212  from holding Esfera Robotics R or generate 13.75% return on investment over 90 days.

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

BNP Paribas Midcap  vs.  Esfera Robotics R

BNP Paribas Midcap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNP Paribas Midcap has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the fund traders.

Esfera Robotics R

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. 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 BNP Paribas and Esfera Robotics

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

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.