Correlation Between Shape Robotics and Monsenso

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

Diversification Opportunities for Shape Robotics and Monsenso

-0.07

Correlation Coefficient

Shape Robotics  Monsenso

Good diversification

The 3 months correlation between Shape and Monsenso is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Shape Robotics AS and Monsenso AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monsenso 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 Monsenso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monsenso AS has no effect on the direction of Shape Robotics i.e., Shape Robotics and Monsenso go up and down completely randomly.

Pair Corralation between Shape Robotics and Monsenso

Assuming the 90 days trading horizon Shape Robotics AS is expected to generate 0.83 times more return on investment than Monsenso. However, Shape Robotics AS is 1.2 times less risky than Monsenso. It trades about -0.02 of its potential returns per unit of risk. Monsenso AS is currently generating about -0.06 per unit of risk. If you would invest  2,300  in Shape Robotics AS on September 13, 2024 and sell it today you would lose (345.00) from holding Shape Robotics AS or give up 15.0% 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.  Monsenso 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 latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Monsenso AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monsenso AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Shape Robotics and Monsenso

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

The idea behind Shape Robotics AS and Monsenso 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.