Correlation Between Shape Robotics and Risma Systems

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

Diversification Opportunities for Shape Robotics and Risma Systems

-0.39

Correlation Coefficient

Shape Robotics  Risma Systems

Very good diversification

The 3 months correlation between Shape and Risma is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shape Robotics AS and Risma Systems AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Risma Systems 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 Risma Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Risma Systems AS has no effect on the direction of Shape Robotics i.e., Shape Robotics and Risma Systems go up and down completely randomly.

Pair Corralation between Shape Robotics and Risma Systems

Assuming the 90 days trading horizon Shape Robotics is expected to generate 1.99 times less return on investment than Risma Systems. In addition to that, Shape Robotics is 1.07 times more volatile than Risma Systems AS. It trades about 0.04 of its total potential returns per unit of risk. Risma Systems AS is currently generating about 0.09 per unit of volatility. If you would invest  650.00  in Risma Systems AS on October 7, 2024 and sell it today you would earn a total of  160.00  from holding Risma Systems AS or generate 24.62% return on investment over 90 days.

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

Shape Robotics AS  vs.  Risma Systems AS

Shape Robotics AS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shape Robotics AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Shape Robotics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Risma Systems AS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Risma Systems AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Risma Systems exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shape Robotics and Risma Systems

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

The idea behind Shape Robotics AS and Risma Systems 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.