Correlation Between Esfera Robotics and Amundi Convictions

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

Diversification Opportunities for Esfera Robotics and Amundi Convictions

0.61

Correlation Coefficient

Esfera Robotics  Amundi Convictions

Poor diversification

The 3 months correlation between Esfera and Amundi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and Amundi Convictions ESR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Convictions ESR 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 Amundi Convictions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Convictions ESR has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and Amundi Convictions go up and down completely randomly.

Pair Corralation between Esfera Robotics and Amundi Convictions

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 1.81 times more return on investment than Amundi Convictions. However, Esfera Robotics is 1.81 times more volatile than Amundi Convictions ESR. It trades about 0.1 of its potential returns per unit of risk. Amundi Convictions ESR is currently generating about 0.05 per unit of risk. 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 Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Esfera Robotics R  vs.  Amundi Convictions ESR

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.

Amundi Convictions ESR

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Amundi Convictions ESR has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Amundi Convictions 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 Amundi Convictions

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

The idea behind Esfera Robotics R and Amundi Convictions ESR 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.