Correlation Between Dlocal and Arbe Robotics

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

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

Diversification Opportunities for Dlocal and Arbe Robotics

-0.47

Correlation Coefficient

Dlocal  Arbe Robotics

Very good diversification

The 3 months correlation between Dlocal and Arbe is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dlocal and Arbe Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbe Robotics and Dlocal 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 Dlocal are associated (or correlated) with Arbe Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbe Robotics has no effect on the direction of Dlocal i.e., Dlocal and Arbe Robotics go up and down completely randomly.

Pair Corralation between Dlocal and Arbe Robotics

Considering the 90-day investment horizon Dlocal is expected to generate 1.01 times more return on investment than Arbe Robotics. However, Dlocal is 1.01 times more volatile than Arbe Robotics. It trades about 0.18 of its potential returns per unit of risk. Arbe Robotics is currently generating about -0.04 per unit of risk. If you would invest  851.00  in Dlocal on September 12, 2024 and sell it today you would earn a total of  331.00  from holding Dlocal or generate 38.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dlocal  vs.  Arbe Robotics

Dlocal

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dlocal are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady essential indicators, Dlocal displayed solid returns over the last few months and may actually be approaching a breakup point.

Arbe Robotics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arbe Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Dlocal and Arbe Robotics

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

The idea behind Dlocal and Arbe 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.