Correlation Between Esfera Robotics and Algebris UCITS

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

Diversification Opportunities for Esfera Robotics and Algebris UCITS

0.01

Correlation Coefficient

Esfera Robotics  Algebris UCITS

Significant diversification

The 3 months correlation between Esfera and Algebris is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and Algebris UCITS Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algebris UCITS Funds 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 Algebris UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algebris UCITS Funds has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and Algebris UCITS go up and down completely randomly.

Pair Corralation between Esfera Robotics and Algebris UCITS

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 9.31 times more return on investment than Algebris UCITS. However, Esfera Robotics is 9.31 times more volatile than Algebris UCITS Funds. It trades about 0.09 of its potential returns per unit of risk. Algebris UCITS Funds is currently generating about 0.21 per unit of risk. If you would invest  30,473  in Esfera Robotics R on September 22, 2024 and sell it today you would earn a total of  4,375  from holding Esfera Robotics R or generate 14.36% return on investment over 90 days.

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

Esfera Robotics R  vs.  Algebris UCITS Funds

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

Algebris UCITS Funds

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Algebris UCITS Funds are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Algebris UCITS 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 Algebris UCITS

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

The idea behind Esfera Robotics R and Algebris UCITS Funds 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.