Correlation Between WISE KTAM and United Robotics

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

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

Diversification Opportunities for WISE KTAM and United Robotics

0.03

Correlation Coefficient

WISE KTAM  United Robotics

Significant diversification

The 3 months correlation between WISE and United is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding WISE KTAM CSI 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 WISE KTAM 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 WISE KTAM CSI 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 WISE KTAM i.e., WISE KTAM and United Robotics go up and down completely randomly.

Pair Corralation between WISE KTAM and United Robotics

Assuming the 90 days trading horizon WISE KTAM is expected to generate 4.06 times less return on investment than United Robotics. But when comparing it to its historical volatility, WISE KTAM CSI is 1.99 times less risky than United Robotics. It trades about 0.04 of its potential returns per unit of risk. United Robotics Artificial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,019  in United Robotics Artificial on October 6, 2024 and sell it today you would earn a total of  340.00  from holding United Robotics Artificial or generate 33.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

WISE KTAM CSI  vs.  United Robotics Artificial

WISE KTAM CSI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WISE KTAM CSI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the ETF 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 WISE KTAM and United Robotics

The main advantage of trading using opposite WISE KTAM and United Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WISE KTAM 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 WISE KTAM CSI 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.