Correlation Between Via Renewables and Arbe Robotics

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

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

Diversification Opportunities for Via Renewables and Arbe Robotics

-0.43

Correlation Coefficient

Via Renewables  Arbe Robotics

Very good diversification

The 3 months correlation between Via and Arbe is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Arbe Robotics Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbe Robotics and Via Renewables 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 Via Renewables 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 Via Renewables i.e., Via Renewables and Arbe Robotics go up and down completely randomly.

Pair Corralation between Via Renewables and Arbe Robotics

Assuming the 90 days horizon Via Renewables is expected to generate 106.62 times less return on investment than Arbe Robotics. But when comparing it to its historical volatility, Via Renewables is 50.21 times less risky than Arbe Robotics. It trades about 0.05 of its potential returns per unit of risk. Arbe Robotics Ltd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Arbe Robotics Ltd on September 13, 2024 and sell it today you would lose (2.00) from holding Arbe Robotics Ltd or give up 11.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.73%
Values	Daily Returns

Via Renewables  vs.  Arbe Robotics Ltd

Via Renewables

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Arbe Robotics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arbe Robotics Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Arbe Robotics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Via Renewables and Arbe Robotics

The main advantage of trading using opposite Via Renewables and Arbe Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables 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 Via Renewables and Arbe Robotics Ltd 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.