Correlation Between Fundamental Invest and Shape Robotics

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

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

Diversification Opportunities for Fundamental Invest and Shape Robotics

0.17

Correlation Coefficient

Fundamental Invest  Shape Robotics

Average diversification

The 3 months correlation between Fundamental and Shape is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Invest Stock 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 Fundamental Invest 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 Fundamental Invest Stock 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 Fundamental Invest i.e., Fundamental Invest and Shape Robotics go up and down completely randomly.

Pair Corralation between Fundamental Invest and Shape Robotics

Assuming the 90 days trading horizon Fundamental Invest Stock is expected to under-perform the Shape Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Fundamental Invest Stock is 7.08 times less risky than Shape Robotics. The stock trades about -0.14 of its potential returns per unit of risk. The Shape Robotics AS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,380  in Shape Robotics AS on September 3, 2024 and sell it today you would lose (210.00) from holding Shape Robotics AS or give up 8.82% of portfolio value over 90 days.

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

Fundamental Invest Stock  vs.  Shape Robotics AS

Fundamental Invest Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundamental Invest Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Shape Robotics AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shape Robotics AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Shape Robotics is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fundamental Invest and Shape Robotics

The main advantage of trading using opposite Fundamental Invest and Shape Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Invest 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 Fundamental Invest Stock 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.