Correlation Between Five9 and Arbe Robotics

Can any of the company-specific risk be diversified away by investing in both Five9 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 Five9 and Arbe Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Five9 Inc and Arbe Robotics, you can compare the effects of market volatilities on Five9 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 Five9 with a short position of Arbe Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five9 and Arbe Robotics.

Diversification Opportunities for Five9 and Arbe Robotics

-0.58

Correlation Coefficient

Five9  Arbe Robotics

Excellent diversification

The 3 months correlation between Five9 and Arbe is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Five9 Inc and Arbe Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbe Robotics and Five9 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 Five9 Inc 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 Five9 i.e., Five9 and Arbe Robotics go up and down completely randomly.

Pair Corralation between Five9 and Arbe Robotics

Given the investment horizon of 90 days Five9 Inc is expected to generate 0.94 times more return on investment than Arbe Robotics. However, Five9 Inc is 1.06 times less risky than Arbe Robotics. It trades about 0.19 of its potential returns per unit of risk. Arbe Robotics is currently generating about -0.08 per unit of risk. If you would invest  2,982  in Five9 Inc on September 4, 2024 and sell it today you would earn a total of  1,164  from holding Five9 Inc or generate 39.03% return on investment over 90 days.

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

Five9 Inc  vs.  Arbe Robotics

Five9 Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Five9 Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Five9 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 weak performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Five9 and Arbe Robotics

The main advantage of trading using opposite Five9 and Arbe Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five9 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 Five9 Inc 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.