Correlation Between Esfera Robotics and Groupama Entreprises

Can any of the company-specific risk be diversified away by investing in both Esfera Robotics and Groupama Entreprises 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 Groupama Entreprises 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 Groupama Entreprises N, you can compare the effects of market volatilities on Esfera Robotics and Groupama Entreprises 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 Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esfera Robotics and Groupama Entreprises.

Diversification Opportunities for Esfera Robotics and Groupama Entreprises

0.94

Correlation Coefficient

Esfera Robotics  Groupama Entreprises

Almost no diversification

The 3 months correlation between Esfera and Groupama is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises 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 Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and Groupama Entreprises go up and down completely randomly.

Pair Corralation between Esfera Robotics and Groupama Entreprises

Assuming the 90 days trading horizon Esfera Robotics R is expected to under-perform the Groupama Entreprises. In addition to that, Esfera Robotics is 95.36 times more volatile than Groupama Entreprises N. It trades about -0.03 of its total potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.97 per unit of volatility. If you would invest  59,259  in Groupama Entreprises N on September 22, 2024 and sell it today you would earn a total of  142.00  from holding Groupama Entreprises N or generate 0.24% return on investment over 90 days.

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

Esfera Robotics R  vs.  Groupama Entreprises N

Esfera Robotics R

Risk-Adjusted Performance

14 of 100

Solid

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

Groupama Entreprises

Risk-Adjusted Performance

78 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 78 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Esfera Robotics and Groupama Entreprises

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

The idea behind Esfera Robotics R and Groupama Entreprises N 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.