Correlation Between Elliptic Laboratories and Kitron ASA

Can any of the company-specific risk be diversified away by investing in both Elliptic Laboratories and Kitron ASA 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 Elliptic Laboratories and Kitron ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Elliptic Laboratories and Kitron ASA

0.15

Correlation Coefficient

Elliptic Laboratories  Kitron ASA

Average diversification

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

Pair Corralation between Elliptic Laboratories and Kitron ASA

Assuming the 90 days trading horizon Elliptic Laboratories is expected to generate 2.26 times less return on investment than Kitron ASA. In addition to that, Elliptic Laboratories is 1.85 times more volatile than Kitron ASA. It trades about 0.05 of its total potential returns per unit of risk. Kitron ASA is currently generating about 0.2 per unit of volatility. If you would invest  3,184  in Kitron ASA on December 2, 2024 and sell it today you would earn a total of  790.00  from holding Kitron ASA or generate 24.81% return on investment over 90 days.

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

Elliptic Laboratories AS  vs.  Kitron ASA

Elliptic Laboratories

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elliptic Laboratories AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Elliptic Laboratories may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kitron ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kitron ASA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Kitron ASA disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elliptic Laboratories and Kitron ASA

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

The idea behind Elliptic Laboratories AS and Kitron ASA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.