Correlation Between Esfera Robotics and Templeton Emerging

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

Diversification Opportunities for Esfera Robotics and Templeton Emerging

0.71

Correlation Coefficient

Esfera Robotics  Templeton Emerging

Poor diversification

The 3 months correlation between Esfera and Templeton is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and Templeton Emerging Mkt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging Mkt 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 Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging Mkt has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and Templeton Emerging go up and down completely randomly.

Pair Corralation between Esfera Robotics and Templeton Emerging

Assuming the 90 days trading horizon Esfera Robotics R is expected to under-perform the Templeton Emerging. In addition to that, Esfera Robotics is 1.88 times more volatile than Templeton Emerging Mkt. It trades about -0.07 of its total potential returns per unit of risk. Templeton Emerging Mkt is currently generating about -0.04 per unit of volatility. If you would invest  633.00  in Templeton Emerging Mkt on December 26, 2024 and sell it today you would lose (11.00) from holding Templeton Emerging Mkt or give up 1.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Esfera Robotics R  vs.  Templeton Emerging Mkt

Esfera Robotics R

Risk-Adjusted Performance

Very Weak

Over the last 90 days Esfera Robotics R has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Esfera Robotics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Templeton Emerging Mkt

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Esfera Robotics R and Templeton Emerging Mkt 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.