Correlation Between Shape Robotics and Scandinavian Medical
Can any of the company-specific risk be diversified away by investing in both Shape Robotics and Scandinavian Medical 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 Scandinavian Medical 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 Scandinavian Medical Solutions, you can compare the effects of market volatilities on Shape Robotics and Scandinavian Medical 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 Scandinavian Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shape Robotics and Scandinavian Medical.
Diversification Opportunities for Shape Robotics and Scandinavian Medical
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shape and Scandinavian is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shape Robotics AS and Scandinavian Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Medical 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 Scandinavian Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Medical has no effect on the direction of Shape Robotics i.e., Shape Robotics and Scandinavian Medical go up and down completely randomly.
Pair Corralation between Shape Robotics and Scandinavian Medical
Assuming the 90 days trading horizon Shape Robotics AS is expected to generate 2.15 times more return on investment than Scandinavian Medical. However, Shape Robotics is 2.15 times more volatile than Scandinavian Medical Solutions. It trades about 0.21 of its potential returns per unit of risk. Scandinavian Medical Solutions is currently generating about 0.13 per unit of risk. If you would invest 1,760 in Shape Robotics AS on August 26, 2024 and sell it today you would earn a total of 620.00 from holding Shape Robotics AS or generate 35.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shape Robotics AS vs. Scandinavian Medical Solutions
Performance |
| Timeline |
| Shape Robotics AS |
| Scandinavian Medical |
Shape Robotics and Scandinavian Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shape Robotics and Scandinavian Medical
The main advantage of trading using opposite Shape Robotics and Scandinavian Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shape Robotics position performs unexpectedly, Scandinavian Medical 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 Scandinavian Medical will offset losses from the drop in Scandinavian Medical's long position.The idea behind Shape Robotics AS and Scandinavian Medical Solutions 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.| Scandinavian Medical vs. MapsPeople AS | Scandinavian Medical vs. Penneo AS | Scandinavian Medical vs. Dataproces Group AS | Scandinavian Medical vs. Orderyoyo 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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