Correlation Between Shape Robotics and FOM Technologies

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

Diversification Opportunities for Shape Robotics and FOM Technologies

0.07

Correlation Coefficient

Shape Robotics  FOM Technologies

Significant diversification

The 3 months correlation between Shape and FOM is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Shape Robotics AS and FOM Technologies AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOM Technologies 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 FOM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOM Technologies has no effect on the direction of Shape Robotics i.e., Shape Robotics and FOM Technologies go up and down completely randomly.

Pair Corralation between Shape Robotics and FOM Technologies

Assuming the 90 days trading horizon Shape Robotics is expected to generate 1.33 times less return on investment than FOM Technologies. But when comparing it to its historical volatility, Shape Robotics AS is 1.21 times less risky than FOM Technologies. It trades about 0.02 of its potential returns per unit of risk. FOM Technologies AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  824.00  in FOM Technologies AS on December 29, 2024 and sell it today you would lose (6.00) from holding FOM Technologies AS or give up 0.73% of portfolio value over 90 days.

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

Shape Robotics AS  vs.  FOM Technologies AS

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.

FOM Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FOM Technologies AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, FOM Technologies is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Shape Robotics and FOM Technologies

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

The idea behind Shape Robotics AS and FOM Technologies 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.