Correlation Between Fast Ejendom and Shape Robotics

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

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

Diversification Opportunities for Fast Ejendom and Shape Robotics

-0.46

Correlation Coefficient

Fast Ejendom  Shape Robotics

Very good diversification

The 3 months correlation between Fast and Shape is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fast Ejendom and Shape Robotics AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shape Robotics AS and Fast Ejendom 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 Fast Ejendom are associated (or correlated) with Shape Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shape Robotics AS has no effect on the direction of Fast Ejendom i.e., Fast Ejendom and Shape Robotics go up and down completely randomly.

Pair Corralation between Fast Ejendom and Shape Robotics

Assuming the 90 days trading horizon Fast Ejendom is expected to generate 0.51 times more return on investment than Shape Robotics. However, Fast Ejendom is 1.94 times less risky than Shape Robotics. It trades about 0.11 of its potential returns per unit of risk. Shape Robotics AS is currently generating about 0.02 per unit of risk. If you would invest  11,900  in Fast Ejendom on December 29, 2024 and sell it today you would earn a total of  1,600  from holding Fast Ejendom or generate 13.45% return on investment over 90 days.

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

Fast Ejendom  vs.  Shape Robotics AS

Fast Ejendom

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fast Ejendom are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Fast Ejendom displayed solid returns over the last few months and may actually be approaching a breakup point.

Shape Robotics AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shape Robotics AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Shape Robotics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fast Ejendom and Shape Robotics

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

The idea behind Fast Ejendom and Shape Robotics AS 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.