Correlation Between Elliptic Laboratories and Pexip Holding

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

Diversification Opportunities for Elliptic Laboratories and Pexip Holding

-0.87

Correlation Coefficient

Elliptic Laboratories  Pexip Holding

Pay attention - limited upside

The 3 months correlation between Elliptic and Pexip is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Elliptic Laboratories AS and Pexip Holding ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pexip Holding 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 Pexip Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pexip Holding ASA has no effect on the direction of Elliptic Laboratories i.e., Elliptic Laboratories and Pexip Holding go up and down completely randomly.

Pair Corralation between Elliptic Laboratories and Pexip Holding

Assuming the 90 days trading horizon Elliptic Laboratories AS is expected to under-perform the Pexip Holding. In addition to that, Elliptic Laboratories is 1.85 times more volatile than Pexip Holding ASA. It trades about -0.13 of its total potential returns per unit of risk. Pexip Holding ASA is currently generating about 0.17 per unit of volatility. If you would invest  3,665  in Pexip Holding ASA on August 30, 2024 and sell it today you would earn a total of  785.00  from holding Pexip Holding ASA or generate 21.42% return on investment over 90 days.

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

Elliptic Laboratories AS  vs.  Pexip Holding ASA

Elliptic Laboratories

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elliptic Laboratories AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pexip Holding ASA

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pexip Holding ASA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Pexip Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elliptic Laboratories and Pexip Holding

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

The idea behind Elliptic Laboratories AS and Pexip Holding 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.