Correlation Between Penneo AS and Shape Robotics

Can any of the company-specific risk be diversified away by investing in both Penneo AS and Shape Robotics 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 Penneo AS and Shape Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Penneo AS and Shape Robotics AS, you can compare the effects of market volatilities on Penneo AS and Shape Robotics 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 Penneo AS with a short position of Shape Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penneo AS and Shape Robotics.

Diversification Opportunities for Penneo AS and Shape Robotics

0.15

Correlation Coefficient

Penneo AS  Shape Robotics

Average diversification

The 3 months correlation between Penneo and Shape is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Penneo AS and Shape Robotics AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shape Robotics AS and Penneo AS 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 Penneo AS are associated (or correlated) with Shape Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shape Robotics AS has no effect on the direction of Penneo AS i.e., Penneo AS and Shape Robotics go up and down completely randomly.

Pair Corralation between Penneo AS and Shape Robotics

Assuming the 90 days trading horizon Penneo AS is expected to generate 0.52 times more return on investment than Shape Robotics. However, Penneo AS is 1.91 times less risky than Shape Robotics. It trades about -0.02 of its potential returns per unit of risk. Shape Robotics AS is currently generating about -0.12 per unit of risk. If you would invest  820.00  in Penneo AS on March 11, 2024 and sell it today you would lose (26.00) from holding Penneo AS or give up 3.17% of portfolio value over 90 days.

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

Penneo AS  vs.  Shape Robotics AS

Penneo AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Penneo AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Penneo AS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Penneo AS and Shape Robotics

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

The idea behind Penneo AS and Shape Robotics 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.