Correlation Between Spectris Plc and RoboGroup TEK

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Can any of the company-specific risk be diversified away by investing in both Spectris Plc and RoboGroup TEK 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 Spectris Plc and RoboGroup TEK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectris plc and RoboGroup TEK, you can compare the effects of market volatilities on Spectris Plc and RoboGroup TEK 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 Spectris Plc with a short position of RoboGroup TEK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectris Plc and RoboGroup TEK.

Diversification Opportunities for Spectris Plc and RoboGroup TEK

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Spectris and RoboGroup is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Spectris plc and RoboGroup TEK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RoboGroup TEK and Spectris Plc 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 Spectris plc are associated (or correlated) with RoboGroup TEK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RoboGroup TEK has no effect on the direction of Spectris Plc i.e., Spectris Plc and RoboGroup TEK go up and down completely randomly.

Pair Corralation between Spectris Plc and RoboGroup TEK

If you would invest  3,656  in Spectris plc on April 22, 2024 and sell it today you would earn a total of  211.00  from holding Spectris plc or generate 5.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

Spectris plc  vs.  RoboGroup TEK

 Performance 
       Timeline  
Spectris plc 

Risk-Adjusted Performance

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Over the last 90 days Spectris plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, Spectris Plc is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
RoboGroup TEK 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days RoboGroup TEK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, RoboGroup TEK is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Spectris Plc and RoboGroup TEK Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Spectris Plc and RoboGroup TEK

The main advantage of trading using opposite Spectris Plc and RoboGroup TEK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectris Plc position performs unexpectedly, RoboGroup TEK 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 RoboGroup TEK will offset losses from the drop in RoboGroup TEK's long position.
The idea behind Spectris plc and RoboGroup TEK 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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