Correlation Between Arbe Robotics and CTS

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

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

Diversification Opportunities for Arbe Robotics and CTS

0.78

Correlation Coefficient

Arbe Robotics  CTS

Poor diversification

The 3 months correlation between Arbe and CTS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Arbe Robotics Ltd and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and Arbe Robotics 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 Arbe Robotics Ltd are associated (or correlated) with CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Arbe Robotics i.e., Arbe Robotics and CTS go up and down completely randomly.

Pair Corralation between Arbe Robotics and CTS

Assuming the 90 days horizon Arbe Robotics Ltd is expected to generate 5.16 times more return on investment than CTS. However, Arbe Robotics is 5.16 times more volatile than CTS Corporation. It trades about -0.01 of its potential returns per unit of risk. CTS Corporation is currently generating about -0.12 per unit of risk. If you would invest  52.00  in Arbe Robotics Ltd on February 3, 2025 and sell it today you would lose (25.00) from holding Arbe Robotics Ltd or give up 48.08% of portfolio value over 90 days.

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

Arbe Robotics Ltd  vs.  CTS Corp.

Arbe Robotics

Risk-Adjusted Performance

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 latest weak performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

CTS Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days CTS Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Arbe Robotics and CTS

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

The idea behind Arbe Robotics Ltd and CTS Corporation 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.