Correlation Between Shape Robotics and Hove AS
Can any of the company-specific risk be diversified away by investing in both Shape Robotics and Hove AS 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 Hove AS 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 Hove AS, you can compare the effects of market volatilities on Shape Robotics and Hove AS 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 Hove AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shape Robotics and Hove AS.
Diversification Opportunities for Shape Robotics and Hove AS
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shape and Hove is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Shape Robotics AS and Hove AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hove 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 Hove AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hove AS has no effect on the direction of Shape Robotics i.e., Shape Robotics and Hove AS go up and down completely randomly.
Pair Corralation between Shape Robotics and Hove AS
Assuming the 90 days trading horizon Shape Robotics AS is expected to generate 1.09 times more return on investment than Hove AS. However, Shape Robotics is 1.09 times more volatile than Hove AS. It trades about 0.02 of its potential returns per unit of risk. Hove AS is currently generating about 0.02 per unit of risk. If you would invest 2,392 in Shape Robotics AS on August 26, 2024 and sell it today you would lose (12.00) from holding Shape Robotics AS or give up 0.5% 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. Hove AS
Performance |
| Timeline |
| Shape Robotics AS |
| Hove AS |
Shape Robotics and Hove AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shape Robotics and Hove AS
The main advantage of trading using opposite Shape Robotics and Hove AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shape Robotics position performs unexpectedly, Hove AS 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 Hove AS will offset losses from the drop in Hove AS's long position.The idea behind Shape Robotics AS and Hove 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.| Hove AS vs. Scandinavian Medical Solutions | Hove AS vs. FOM Technologies AS | Hove AS vs. Shape Robotics AS | Hove AS vs. Dataproces Group AS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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