Correlation Between BerolinaCapital Premium and Esfera Robotics

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

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

Diversification Opportunities for BerolinaCapital Premium and Esfera Robotics

0.87

Correlation Coefficient

BerolinaCapital Premium  Esfera Robotics

Very poor diversification

The 3 months correlation between BerolinaCapital and Esfera is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BerolinaCapital Premium 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 BerolinaCapital Premium 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 BerolinaCapital Premium 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 BerolinaCapital Premium i.e., BerolinaCapital Premium and Esfera Robotics go up and down completely randomly.

Pair Corralation between BerolinaCapital Premium and Esfera Robotics

Assuming the 90 days trading horizon BerolinaCapital Premium is expected to generate 0.68 times more return on investment than Esfera Robotics. However, BerolinaCapital Premium is 1.47 times less risky than Esfera Robotics. It trades about 0.12 of its potential returns per unit of risk. Esfera Robotics R is currently generating about -0.08 per unit of risk. If you would invest  9,149  in BerolinaCapital Premium on September 24, 2024 and sell it today you would earn a total of  166.00  from holding BerolinaCapital Premium or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

BerolinaCapital Premium  vs.  Esfera Robotics R

BerolinaCapital Premium

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BerolinaCapital Premium are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable fundamental indicators, BerolinaCapital Premium is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Esfera Robotics R

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat fragile basic indicators, Esfera Robotics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BerolinaCapital Premium and Esfera Robotics

The main advantage of trading using opposite BerolinaCapital Premium and Esfera Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BerolinaCapital Premium 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 BerolinaCapital Premium 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.