Correlation Between Esfera Robotics and UBS Money

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

Diversification Opportunities for Esfera Robotics and UBS Money

0.94

Correlation Coefficient

Esfera Robotics  UBS Money

Almost no diversification

The 3 months correlation between Esfera and UBS is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Esfera Robotics R and UBS Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Money Market 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 UBS Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Money Market has no effect on the direction of Esfera Robotics i.e., Esfera Robotics and UBS Money go up and down completely randomly.

Pair Corralation between Esfera Robotics and UBS Money

Assuming the 90 days trading horizon Esfera Robotics R is expected to generate 3.35 times more return on investment than UBS Money. However, Esfera Robotics is 3.35 times more volatile than UBS Money Market. It trades about 0.09 of its potential returns per unit of risk. UBS Money Market is currently generating about 0.13 per unit of risk. If you would invest  30,473  in Esfera Robotics R on September 22, 2024 and sell it today you would earn a total of  4,375  from holding Esfera Robotics R or generate 14.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.92%
Values	Daily Returns

Esfera Robotics R  vs.  UBS Money Market

Esfera Robotics R

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat fragile basic indicators, Esfera Robotics sustained solid returns over the last few months and may actually be approaching a breakup point.

UBS Money Market

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Money Market are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, UBS Money may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Esfera Robotics and UBS Money

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

The idea behind Esfera Robotics R and UBS Money Market 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.