Correlation Between 1StdibsCom and IRobot

Can any of the company-specific risk be diversified away by investing in both 1StdibsCom and IRobot 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 1StdibsCom and IRobot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1StdibsCom and iRobot, you can compare the effects of market volatilities on 1StdibsCom and IRobot 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 1StdibsCom with a short position of IRobot. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1StdibsCom and IRobot.

Diversification Opportunities for 1StdibsCom and IRobot

0.65

Correlation Coefficient

1StdibsCom  IRobot

Poor diversification

The 3 months correlation between 1StdibsCom and IRobot is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding 1StdibsCom and iRobot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iRobot and 1StdibsCom 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 1StdibsCom are associated (or correlated) with IRobot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iRobot has no effect on the direction of 1StdibsCom i.e., 1StdibsCom and IRobot go up and down completely randomly.

Pair Corralation between 1StdibsCom and IRobot

Given the investment horizon of 90 days 1StdibsCom is expected to generate 9.53 times less return on investment than IRobot. But when comparing it to its historical volatility, 1StdibsCom is 3.32 times less risky than IRobot. It trades about 0.06 of its potential returns per unit of risk. iRobot is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  210.00  in iRobot on April 23, 2025 and sell it today you would earn a total of  239.50  from holding iRobot or generate 114.05% return on investment over 90 days.

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

1StdibsCom  vs.  iRobot

1StdibsCom

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 1StdibsCom are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental drivers, 1StdibsCom may actually be approaching a critical reversion point that can send shares even higher in August 2025.

iRobot

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iRobot are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, IRobot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 1StdibsCom and IRobot

The main advantage of trading using opposite 1StdibsCom and IRobot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1StdibsCom position performs unexpectedly, IRobot 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 IRobot will offset losses from the drop in IRobot's long position.

The idea behind 1StdibsCom and iRobot 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.