Correlation Between Esfera Robotics and AXA World

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

Diversification Opportunities for Esfera Robotics and AXA World

-0.65

Correlation Coefficient

Esfera Robotics  AXA World

Excellent diversification

The 3 months correlation between Esfera and AXA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and AXA World Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA World 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 AXA World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA World Funds has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and AXA World go up and down completely randomly.

Pair Corralation between Esfera Robotics and AXA World

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 2.09 times more return on investment than AXA World. However, Esfera Robotics is 2.09 times more volatile than AXA World Funds. It trades about 0.0 of its potential returns per unit of risk. AXA World Funds is currently generating about -0.26 per unit of risk. If you would invest  36,225  in Esfera Robotics R on October 12, 2024 and sell it today you would lose (54.00) from holding Esfera Robotics R or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

Esfera Robotics R  vs.  AXA World Funds

Esfera Robotics R

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Esfera Robotics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AXA World Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA World Funds has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, AXA World is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Esfera Robotics and AXA World

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

The idea behind Esfera Robotics R and AXA World 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.