Correlation Between Shape Robotics and DecideAct

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

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

Diversification Opportunities for Shape Robotics and DecideAct

0.62

Correlation Coefficient

Shape Robotics  DecideAct

Poor diversification

The 3 months correlation between Shape and DecideAct is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shape Robotics AS and DecideAct AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DecideAct AS and Shape 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 Shape Robotics AS are associated (or correlated) with DecideAct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DecideAct AS has no effect on the direction of Shape Robotics i.e., Shape Robotics and DecideAct go up and down completely randomly.

Pair Corralation between Shape Robotics and DecideAct

Assuming the 90 days trading horizon Shape Robotics AS is expected to under-perform the DecideAct. But the stock apears to be less risky and, when comparing its historical volatility, Shape Robotics AS is 1.83 times less risky than DecideAct. The stock trades about -0.09 of its potential returns per unit of risk. The DecideAct AS is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  170.00  in DecideAct AS on December 4, 2024 and sell it today you would lose (42.00) from holding DecideAct AS or give up 24.71% of portfolio value over 90 days.

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

Shape Robotics AS  vs.  DecideAct AS

Shape Robotics AS

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DecideAct AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DecideAct AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Shape Robotics and DecideAct

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

The idea behind Shape Robotics AS and DecideAct 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.