Correlation Between Grupo Ecoener and Robot SA

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

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

Diversification Opportunities for Grupo Ecoener and Robot SA

-0.31

Correlation Coefficient

Grupo Ecoener  Robot SA

Very good diversification

The 3 months correlation between Grupo and Robot is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Ecoener SA and Robot SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robot SA and Grupo Ecoener 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 Grupo Ecoener SA are associated (or correlated) with Robot SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robot SA has no effect on the direction of Grupo Ecoener i.e., Grupo Ecoener and Robot SA go up and down completely randomly.

Pair Corralation between Grupo Ecoener and Robot SA

Assuming the 90 days trading horizon Grupo Ecoener SA is expected to generate 0.35 times more return on investment than Robot SA. However, Grupo Ecoener SA is 2.88 times less risky than Robot SA. It trades about 0.16 of its potential returns per unit of risk. Robot SA is currently generating about 0.03 per unit of risk. If you would invest  369.00  in Grupo Ecoener SA on September 3, 2024 and sell it today you would earn a total of  65.00  from holding Grupo Ecoener SA or generate 17.62% return on investment over 90 days.

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

Grupo Ecoener SA  vs.  Robot SA

Grupo Ecoener SA

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Ecoener SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Grupo Ecoener exhibited solid returns over the last few months and may actually be approaching a breakup point.

Robot SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Robot SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Robot SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Grupo Ecoener and Robot SA

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

The idea behind Grupo Ecoener SA and Robot SA 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.