Correlation Between ARK Autonomous and Robo Global

Can any of the company-specific risk be diversified away by investing in both ARK Autonomous and Robo Global 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 ARK Autonomous and Robo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ARK Autonomous Technology and Robo Global Robotics, you can compare the effects of market volatilities on ARK Autonomous and Robo Global 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 ARK Autonomous with a short position of Robo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Autonomous and Robo Global.

Diversification Opportunities for ARK Autonomous and Robo Global

0.8

Correlation Coefficient

ARK Autonomous  Robo Global

Very poor diversification

The 3 months correlation between ARK and Robo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ARK Autonomous Technology and Robo Global Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robo Global Robotics and ARK Autonomous 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 ARK Autonomous Technology are associated (or correlated) with Robo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robo Global Robotics has no effect on the direction of ARK Autonomous i.e., ARK Autonomous and Robo Global go up and down completely randomly.

Pair Corralation between ARK Autonomous and Robo Global

Given the investment horizon of 90 days ARK Autonomous Technology is expected to under-perform the Robo Global. In addition to that, ARK Autonomous is 1.63 times more volatile than Robo Global Robotics. It trades about -0.07 of its total potential returns per unit of risk. Robo Global Robotics is currently generating about -0.06 per unit of volatility. If you would invest  5,738  in Robo Global Robotics on December 26, 2024 and sell it today you would lose (308.00) from holding Robo Global Robotics or give up 5.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

ARK Autonomous Technology  vs.  Robo Global Robotics

ARK Autonomous Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days ARK Autonomous Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Etf's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Robo Global Robotics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Robo Global Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Robo Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ARK Autonomous and Robo Global

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

The idea behind ARK Autonomous Technology and Robo Global Robotics 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.