Correlation Between Esfera Robotics and Swedbank Robur

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

Diversification Opportunities for Esfera Robotics and Swedbank Robur

0.85

Correlation Coefficient

Esfera Robotics  Swedbank Robur

Very poor diversification

The 3 months correlation between Esfera and Swedbank is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and Swedbank Robur Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank Robur Corporate 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 Swedbank Robur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank Robur Corporate has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and Swedbank Robur go up and down completely randomly.

Pair Corralation between Esfera Robotics and Swedbank Robur

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 6.88 times more return on investment than Swedbank Robur. However, Esfera Robotics is 6.88 times more volatile than Swedbank Robur Corporate. It trades about 0.2 of its potential returns per unit of risk. Swedbank Robur Corporate is currently generating about 0.05 per unit of risk. If you would invest  30,966  in Esfera Robotics R on October 1, 2024 and sell it today you would earn a total of  4,602  from holding Esfera Robotics R or generate 14.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Esfera Robotics R  vs.  Swedbank Robur Corporate

Esfera Robotics R

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 16 (%) 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.

Swedbank Robur Corporate

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank Robur Corporate are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Swedbank Robur is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Esfera Robotics and Swedbank Robur

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

The idea behind Esfera Robotics R and Swedbank Robur Corporate 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.