Correlation Between Robot SA and EDreams Odigeo

Can any of the company-specific risk be diversified away by investing in both Robot SA and EDreams Odigeo 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 Robot SA and EDreams Odigeo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Robot SA and eDreams Odigeo SA, you can compare the effects of market volatilities on Robot SA and EDreams Odigeo 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 Robot SA with a short position of EDreams Odigeo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robot SA and EDreams Odigeo.

Diversification Opportunities for Robot SA and EDreams Odigeo

0.59

Correlation Coefficient

Robot SA  EDreams Odigeo

Very weak diversification

The 3 months correlation between Robot and EDreams is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Robot SA and eDreams Odigeo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eDreams Odigeo SA and Robot SA 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 Robot SA are associated (or correlated) with EDreams Odigeo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eDreams Odigeo SA has no effect on the direction of Robot SA i.e., Robot SA and EDreams Odigeo go up and down completely randomly.

Pair Corralation between Robot SA and EDreams Odigeo

Assuming the 90 days trading horizon Robot SA is expected to generate 1.62 times more return on investment than EDreams Odigeo. However, Robot SA is 1.62 times more volatile than eDreams Odigeo SA. It trades about 0.13 of its potential returns per unit of risk. eDreams Odigeo SA is currently generating about 0.12 per unit of risk. If you would invest  190.00  in Robot SA on April 22, 2025 and sell it today you would earn a total of  54.00  from holding Robot SA or generate 28.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Robot SA  vs.  eDreams Odigeo SA

Robot SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Robot SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Robot SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

eDreams Odigeo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in eDreams Odigeo SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, EDreams Odigeo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Robot SA and EDreams Odigeo

The main advantage of trading using opposite Robot SA and EDreams Odigeo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robot SA position performs unexpectedly, EDreams Odigeo 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 EDreams Odigeo will offset losses from the drop in EDreams Odigeo's long position.

The idea behind Robot SA and eDreams Odigeo SA 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.