Correlation Between Fineco AM and Esfera Robotics

Can any of the company-specific risk be diversified away by investing in both Fineco AM and Esfera Robotics 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 Fineco AM and Esfera Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fineco AM Pasv and Esfera Robotics R, you can compare the effects of market volatilities on Fineco AM and Esfera Robotics 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 Fineco AM with a short position of Esfera Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fineco AM and Esfera Robotics.

Diversification Opportunities for Fineco AM and Esfera Robotics

0.94

Correlation Coefficient

Fineco AM  Esfera Robotics

Almost no diversification

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

Pair Corralation between Fineco AM and Esfera Robotics

Assuming the 90 days trading horizon Fineco AM Pasv is expected to under-perform the Esfera Robotics. But the fund apears to be less risky and, when comparing its historical volatility, Fineco AM Pasv is 2.13 times less risky than Esfera Robotics. The fund trades about -0.11 of its potential returns per unit of risk. The Esfera Robotics R is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  35,573  in Esfera Robotics R on December 27, 2024 and sell it today you would lose (1,310) from holding Esfera Robotics R or give up 3.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Fineco AM Pasv  vs.  Esfera Robotics R

Fineco AM Pasv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fineco AM Pasv has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Fineco AM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Fineco AM and Esfera Robotics

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

The idea behind Fineco AM Pasv and Esfera Robotics R 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.