Correlation Between Shape Robotics and Agat Ejendomme

Can any of the company-specific risk be diversified away by investing in both Shape Robotics and Agat Ejendomme 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 Agat Ejendomme 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 Agat Ejendomme AS, you can compare the effects of market volatilities on Shape Robotics and Agat Ejendomme 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 Agat Ejendomme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shape Robotics and Agat Ejendomme.

Diversification Opportunities for Shape Robotics and Agat Ejendomme

-0.38

Correlation Coefficient

Shape Robotics  Agat Ejendomme

Very good diversification

The 3 months correlation between Shape and Agat is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shape Robotics AS and Agat Ejendomme AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agat Ejendomme 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 Agat Ejendomme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agat Ejendomme AS has no effect on the direction of Shape Robotics i.e., Shape Robotics and Agat Ejendomme go up and down completely randomly.

Pair Corralation between Shape Robotics and Agat Ejendomme

Assuming the 90 days trading horizon Shape Robotics AS is expected to generate 1.82 times more return on investment than Agat Ejendomme. However, Shape Robotics is 1.82 times more volatile than Agat Ejendomme AS. It trades about 0.01 of its potential returns per unit of risk. Agat Ejendomme AS is currently generating about -0.02 per unit of risk. If you would invest  2,323  in Shape Robotics AS on September 12, 2024 and sell it today you would lose (353.00) from holding Shape Robotics AS or give up 15.2% of portfolio value over 90 days.

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

Shape Robotics AS  vs.  Agat Ejendomme AS

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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Agat Ejendomme AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agat Ejendomme AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Shape Robotics and Agat Ejendomme

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

The idea behind Shape Robotics AS and Agat Ejendomme 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.