Correlation Between Esfera Robotics and Invesco Pan

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

Diversification Opportunities for Esfera Robotics and Invesco Pan

-0.32

Correlation Coefficient

Esfera Robotics  Invesco Pan

Very good diversification

The 3 months correlation between Esfera and Invesco is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and Invesco Pan European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Pan European 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 Invesco Pan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Pan European has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and Invesco Pan go up and down completely randomly.

Pair Corralation between Esfera Robotics and Invesco Pan

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 1.63 times more return on investment than Invesco Pan. However, Esfera Robotics is 1.63 times more volatile than Invesco Pan European. It trades about 0.19 of its potential returns per unit of risk. Invesco Pan European is currently generating about -0.11 per unit of risk. If you would invest  31,299  in Esfera Robotics R on October 6, 2024 and sell it today you would earn a total of  4,136  from holding Esfera Robotics R or generate 13.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.92%
Values	Daily Returns

Esfera Robotics R  vs.  Invesco Pan European

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

Invesco Pan European

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Pan European has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, Invesco Pan is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Esfera Robotics and Invesco Pan

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

The idea behind Esfera Robotics R and Invesco Pan European 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.