Correlation Between Esfera Robotics and BNP Paribas

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

Diversification Opportunities for Esfera Robotics and BNP Paribas

-0.86

Correlation Coefficient

Esfera Robotics  BNP Paribas

Pay attention - limited upside

The 3 months correlation between Esfera and BNP is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and BNP Paribas Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas Midcap 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 BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas Midcap has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and BNP Paribas go up and down completely randomly.

Pair Corralation between Esfera Robotics and BNP Paribas

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 1.42 times more return on investment than BNP Paribas. However, Esfera Robotics is 1.42 times more volatile than BNP Paribas Midcap. It trades about -0.1 of its potential returns per unit of risk. BNP Paribas Midcap is currently generating about -0.17 per unit of risk. If you would invest  35,654  in Esfera Robotics R on September 23, 2024 and sell it today you would lose (806.00) from holding Esfera Robotics R or give up 2.26% of portfolio value over 90 days.

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

Esfera Robotics R  vs.  BNP Paribas Midcap

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.

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.

Pair Trading with Esfera Robotics and BNP Paribas

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

The idea behind Esfera Robotics R and BNP Paribas Midcap 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.