Correlation Between Esfera Robotics and JPM Emerging

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

Diversification Opportunities for Esfera Robotics and JPM Emerging

0.13

Correlation Coefficient

Esfera Robotics  JPM Emerging

Average diversification

The 3 months correlation between Esfera and JPM is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and JPM Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Emerging Markets 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 JPM Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Emerging Markets has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and JPM Emerging go up and down completely randomly.

Pair Corralation between Esfera Robotics and JPM Emerging

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 1.06 times more return on investment than JPM Emerging. However, Esfera Robotics is 1.06 times more volatile than JPM Emerging Markets. It trades about 0.24 of its potential returns per unit of risk. JPM Emerging Markets is currently generating about 0.09 per unit of risk. If you would invest  35,573  in Esfera Robotics R on October 26, 2024 and sell it today you would earn a total of  1,587  from holding Esfera Robotics R or generate 4.46% 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.  JPM Emerging Markets

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

JPM Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPM Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, JPM Emerging 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 JPM Emerging

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

The idea behind Esfera Robotics R and JPM Emerging Markets 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.