Correlation Between Esfera Robotics and BerolinaCapital Premium

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

Diversification Opportunities for Esfera Robotics and BerolinaCapital Premium

0.83

Correlation Coefficient

Esfera Robotics  BerolinaCapital Premium

Very poor diversification

The 3 months correlation between Esfera and BerolinaCapital is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and BerolinaCapital Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BerolinaCapital Premium 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 BerolinaCapital Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BerolinaCapital Premium has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and BerolinaCapital Premium go up and down completely randomly.

Pair Corralation between Esfera Robotics and BerolinaCapital Premium

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 1.38 times more return on investment than BerolinaCapital Premium. However, Esfera Robotics is 1.38 times more volatile than BerolinaCapital Premium. It trades about 0.14 of its potential returns per unit of risk. BerolinaCapital Premium is currently generating about 0.03 per unit of risk. If you would invest  32,357  in Esfera Robotics R on October 12, 2024 and sell it today you would earn a total of  3,150  from holding Esfera Robotics R or generate 9.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.61%
Values	Daily Returns

Esfera Robotics R  vs.  BerolinaCapital Premium

Esfera Robotics R

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 10 (%) 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.

BerolinaCapital Premium

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BerolinaCapital Premium are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable fundamental indicators, BerolinaCapital Premium is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Esfera Robotics and BerolinaCapital Premium

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

The idea behind Esfera Robotics R and BerolinaCapital Premium 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.