Correlation Between BCAP SET100 and United Robotics

Can any of the company-specific risk be diversified away by investing in both BCAP SET100 and United 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 BCAP SET100 and United Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BCAP SET100 and United Robotics Artificial, you can compare the effects of market volatilities on BCAP SET100 and United 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 BCAP SET100 with a short position of United Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCAP SET100 and United Robotics.

Diversification Opportunities for BCAP SET100 and United Robotics

-0.16

Correlation Coefficient

BCAP SET100  United Robotics

Good diversification

The 3 months correlation between BCAP and United is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BCAP SET100 and United Robotics Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Robotics Arti and BCAP SET100 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 BCAP SET100 are associated (or correlated) with United Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Robotics Arti has no effect on the direction of BCAP SET100 i.e., BCAP SET100 and United Robotics go up and down completely randomly.

Pair Corralation between BCAP SET100 and United Robotics

Assuming the 90 days trading horizon BCAP SET100 is expected to generate 3.98 times less return on investment than United Robotics. But when comparing it to its historical volatility, BCAP SET100 is 1.99 times less risky than United Robotics. It trades about 0.06 of its potential returns per unit of risk. United Robotics Artificial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,240  in United Robotics Artificial on October 6, 2024 and sell it today you would earn a total of  119.00  from holding United Robotics Artificial or generate 9.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.59%
Values	Daily Returns

BCAP SET100  vs.  United Robotics Artificial

BCAP SET100

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCAP SET100 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BCAP SET100 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

United Robotics Arti

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Robotics Artificial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, United Robotics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BCAP SET100 and United Robotics

The main advantage of trading using opposite BCAP SET100 and United Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCAP SET100 position performs unexpectedly, United 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 United Robotics will offset losses from the drop in United Robotics' long position.

The idea behind BCAP SET100 and United Robotics Artificial 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.