Correlation Between Arbe Robotics and Innovative Payment

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

By analyzing existing cross correlation between Arbe Robotics Ltd and Innovative Payment Solutions, you can compare the effects of market volatilities on Arbe Robotics and Innovative Payment 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 Arbe Robotics with a short position of Innovative Payment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbe Robotics and Innovative Payment.

Diversification Opportunities for Arbe Robotics and Innovative Payment

-0.09

Correlation Coefficient

Arbe Robotics  Innovative Payment

Good diversification

The 3 months correlation between Arbe and Innovative is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Arbe Robotics Ltd and Innovative Payment Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Payment and Arbe 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 Arbe Robotics Ltd are associated (or correlated) with Innovative Payment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Payment has no effect on the direction of Arbe Robotics i.e., Arbe Robotics and Innovative Payment go up and down completely randomly.

Pair Corralation between Arbe Robotics and Innovative Payment

Assuming the 90 days horizon Arbe Robotics Ltd is expected to generate 1.41 times more return on investment than Innovative Payment. However, Arbe Robotics is 1.41 times more volatile than Innovative Payment Solutions. It trades about 0.22 of its potential returns per unit of risk. Innovative Payment Solutions is currently generating about -0.05 per unit of risk. If you would invest  14.00  in Arbe Robotics Ltd on October 7, 2024 and sell it today you would earn a total of  24.00  from holding Arbe Robotics Ltd or generate 171.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.68%
Values	Daily Returns

Arbe Robotics Ltd  vs.  Innovative Payment Solutions

Arbe Robotics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arbe Robotics Ltd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Arbe Robotics showed solid returns over the last few months and may actually be approaching a breakup point.

Innovative Payment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Payment Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Innovative Payment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Arbe Robotics and Innovative Payment

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

The idea behind Arbe Robotics Ltd and Innovative Payment Solutions 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.