Correlation Between IRobot and Energy Focu
Can any of the company-specific risk be diversified away by investing in both IRobot and Energy Focu 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 IRobot and Energy Focu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iRobot and Energy Focu, you can compare the effects of market volatilities on IRobot and Energy Focu 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 IRobot with a short position of Energy Focu. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRobot and Energy Focu.
Diversification Opportunities for IRobot and Energy Focu
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IRobot and Energy is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding iRobot and Energy Focu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Focu and IRobot 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 iRobot are associated (or correlated) with Energy Focu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Focu has no effect on the direction of IRobot i.e., IRobot and Energy Focu go up and down completely randomly.
Pair Corralation between IRobot and Energy Focu
Given the investment horizon of 90 days iRobot is expected to under-perform the Energy Focu. In addition to that, IRobot is 1.6 times more volatile than Energy Focu. It trades about -0.01 of its total potential returns per unit of risk. Energy Focu is currently generating about 0.05 per unit of volatility. If you would invest 124.00 in Energy Focu on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Energy Focu or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
iRobot vs. Energy Focu
Performance |
| Timeline |
| iRobot |
| Energy Focu |
IRobot and Energy Focu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRobot and Energy Focu
The main advantage of trading using opposite IRobot and Energy Focu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRobot position performs unexpectedly, Energy Focu 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 Energy Focu will offset losses from the drop in Energy Focu's long position.| IRobot vs. Tempur Sealy International | IRobot vs. La Z Boy Incorporated | IRobot vs. Purple Innovation | IRobot vs. MasterBrand |
| Energy Focu vs. Petros Pharmaceuticals | Energy Focu vs. Pioneer Power Solutions | Energy Focu vs. Ensysce Biosciences |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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