Correlation Between Risma Systems and Shape Robotics

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

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

Diversification Opportunities for Risma Systems and Shape Robotics

-0.49

Correlation Coefficient

Risma Systems  Shape Robotics

Very good diversification

The 3 months correlation between Risma and Shape is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Risma Systems AS 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 Risma Systems 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 Risma Systems AS 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 Risma Systems i.e., Risma Systems and Shape Robotics go up and down completely randomly.

Pair Corralation between Risma Systems and Shape Robotics

Assuming the 90 days trading horizon Risma Systems AS is expected to generate 1.08 times more return on investment than Shape Robotics. However, Risma Systems is 1.08 times more volatile than Shape Robotics AS. It trades about 0.03 of its potential returns per unit of risk. Shape Robotics AS is currently generating about -0.01 per unit of risk. If you would invest  740.00  in Risma Systems AS on October 4, 2024 and sell it today you would earn a total of  75.00  from holding Risma Systems AS or generate 10.14% return on investment over 90 days.

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

Risma Systems AS  vs.  Shape Robotics AS

Risma Systems AS

Risk-Adjusted Performance

8 of 100

OK

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

Shape Robotics AS

Risk-Adjusted Performance

1 of 100

Very 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 unfluctuating fundamental indicators, Shape Robotics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Risma Systems and Shape Robotics

The main advantage of trading using opposite Risma Systems and Shape Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Risma Systems 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 Risma Systems AS 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.