Correlation Between SISF BRIC and Esfera Robotics

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

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

Diversification Opportunities for SISF BRIC and Esfera Robotics

-0.37

Correlation Coefficient

SISF BRIC  Esfera Robotics

Very good diversification

The 3 months correlation between SISF and Esfera is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SISF BRIC AC 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 SISF BRIC 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 SISF BRIC AC 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 SISF BRIC i.e., SISF BRIC and Esfera Robotics go up and down completely randomly.

Pair Corralation between SISF BRIC and Esfera Robotics

Assuming the 90 days trading horizon SISF BRIC is expected to generate 1.58 times less return on investment than Esfera Robotics. In addition to that, SISF BRIC is 1.08 times more volatile than Esfera Robotics R. It trades about 0.06 of its total potential returns per unit of risk. Esfera Robotics R is currently generating about 0.1 per unit of volatility. If you would invest  21,097  in Esfera Robotics R on October 4, 2024 and sell it today you would earn a total of  14,338  from holding Esfera Robotics R or generate 67.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	44.11%
Values	Daily Returns

SISF BRIC AC  vs.  Esfera Robotics R

SISF BRIC AC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SISF BRIC AC has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, SISF BRIC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Esfera Robotics R

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Esfera Robotics R are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. 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 SISF BRIC and Esfera Robotics

The main advantage of trading using opposite SISF BRIC and Esfera Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SISF BRIC 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 SISF BRIC AC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.