Correlation Between Shape Robotics and MapsPeople

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

Diversification Opportunities for Shape Robotics and MapsPeople

0.2

Correlation Coefficient

Shape Robotics  MapsPeople

Modest diversification

The 3 months correlation between Shape and MapsPeople is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shape Robotics AS and MapsPeople AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MapsPeople 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 MapsPeople. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MapsPeople AS has no effect on the direction of Shape Robotics i.e., Shape Robotics and MapsPeople go up and down completely randomly.

Pair Corralation between Shape Robotics and MapsPeople

Assuming the 90 days trading horizon Shape Robotics AS is expected to generate 0.87 times more return on investment than MapsPeople. However, Shape Robotics AS is 1.14 times less risky than MapsPeople. It trades about 0.15 of its potential returns per unit of risk. MapsPeople AS is currently generating about -0.06 per unit of risk. If you would invest  1,745  in Shape Robotics AS on September 1, 2024 and sell it today you would earn a total of  425.00  from holding Shape Robotics AS or generate 24.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Shape Robotics AS  vs.  MapsPeople 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.

MapsPeople AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MapsPeople 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 December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Shape Robotics and MapsPeople

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

The idea behind Shape Robotics AS and MapsPeople 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.