Correlation Between FF European and Esfera Robotics

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

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

Diversification Opportunities for FF European and Esfera Robotics

0.0

Correlation Coefficient

FF European  Esfera Robotics

Pay attention - limited upside

The 3 months correlation between FJ2B and Esfera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FF European 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 FF European 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 FF European 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 FF European i.e., FF European and Esfera Robotics go up and down completely randomly.

Pair Corralation between FF European and Esfera Robotics

If you would invest  21,152  in Esfera Robotics R on October 5, 2024 and sell it today you would earn a total of  14,283  from holding Esfera Robotics R or generate 67.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FF European  vs.  Esfera Robotics R

FF European

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FF European has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, FF European is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Esfera Robotics R

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Esfera Robotics R has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat weak basic indicators, Esfera Robotics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FF European and Esfera Robotics

The main advantage of trading using opposite FF European and Esfera Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FF European 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 FF European 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.