Correlation Between Esfera Robotics and Naranja Standard

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

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

Diversification Opportunities for Esfera Robotics and Naranja Standard

0.91

Correlation Coefficient

Esfera Robotics  Naranja Standard

Almost no diversification

The 3 months correlation between Esfera and Naranja is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and Naranja Standard Poors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naranja Standard Poors and Esfera 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 Esfera Robotics R are associated (or correlated) with Naranja Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naranja Standard Poors has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and Naranja Standard go up and down completely randomly.

Pair Corralation between Esfera Robotics and Naranja Standard

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 1.32 times more return on investment than Naranja Standard. However, Esfera Robotics is 1.32 times more volatile than Naranja Standard Poors. It trades about 0.2 of its potential returns per unit of risk. Naranja Standard Poors is currently generating about 0.18 per unit of risk. If you would invest  31,028  in Esfera Robotics R on October 3, 2024 and sell it today you would earn a total of  4,407  from holding Esfera Robotics R or generate 14.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Esfera Robotics R  vs.  Naranja Standard Poors

Esfera Robotics R

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 15 (%) 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.

Naranja Standard Poors

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Naranja Standard Poors are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Naranja Standard may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Esfera Robotics and Naranja Standard

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

The idea behind Esfera Robotics R and Naranja Standard Poors 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.