Correlation Between Polight ASA and ExpreS2ion Biotech

Can any of the company-specific risk be diversified away by investing in both Polight ASA and ExpreS2ion Biotech 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 Polight ASA and ExpreS2ion Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Polight ASA and ExpreS2ion Biotech Holding, you can compare the effects of market volatilities on Polight ASA and ExpreS2ion Biotech 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 Polight ASA with a short position of ExpreS2ion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polight ASA and ExpreS2ion Biotech.

Diversification Opportunities for Polight ASA and ExpreS2ion Biotech

-0.6

Correlation Coefficient

Polight ASA  ExpreS2ion Biotech

Excellent diversification

The 3 months correlation between Polight and ExpreS2ion is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Polight ASA and ExpreS2ion Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExpreS2ion Biotech and Polight ASA 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 Polight ASA are associated (or correlated) with ExpreS2ion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExpreS2ion Biotech has no effect on the direction of Polight ASA i.e., Polight ASA and ExpreS2ion Biotech go up and down completely randomly.

Pair Corralation between Polight ASA and ExpreS2ion Biotech

Assuming the 90 days trading horizon Polight ASA is expected to under-perform the ExpreS2ion Biotech. In addition to that, Polight ASA is 1.3 times more volatile than ExpreS2ion Biotech Holding. It trades about -0.12 of its total potential returns per unit of risk. ExpreS2ion Biotech Holding is currently generating about 0.02 per unit of volatility. If you would invest  2,700  in ExpreS2ion Biotech Holding on November 29, 2024 and sell it today you would earn a total of  0.00  from holding ExpreS2ion Biotech Holding or generate 0.0% return on investment over 90 days.

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

Polight ASA  vs.  ExpreS2ion Biotech Holding

Polight ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polight ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ExpreS2ion Biotech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ExpreS2ion Biotech Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, ExpreS2ion Biotech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Polight ASA and ExpreS2ion Biotech

The main advantage of trading using opposite Polight ASA and ExpreS2ion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polight ASA position performs unexpectedly, ExpreS2ion Biotech 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 ExpreS2ion Biotech will offset losses from the drop in ExpreS2ion Biotech's long position.

The idea behind Polight ASA and ExpreS2ion Biotech Holding 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.