Correlation Between Elkem ASA and Pexip Holding
Can any of the company-specific risk be diversified away by investing in both Elkem ASA 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 Elkem ASA and Pexip Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elkem ASA and Pexip Holding ASA, you can compare the effects of market volatilities on Elkem ASA 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 Elkem ASA with a short position of Pexip Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elkem ASA and Pexip Holding.
Diversification Opportunities for Elkem ASA and Pexip Holding
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elkem and Pexip is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Elkem ASA 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 Elkem 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 Elkem ASA 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 Elkem ASA i.e., Elkem ASA and Pexip Holding go up and down completely randomly.
Pair Corralation between Elkem ASA and Pexip Holding
Assuming the 90 days trading horizon Elkem ASA is expected to under-perform the Pexip Holding. But the stock apears to be less risky and, when comparing its historical volatility, Elkem ASA is 1.28 times less risky than Pexip Holding. The stock trades about -0.01 of its potential returns per unit of risk. The Pexip Holding ASA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,255 in Pexip Holding ASA on August 30, 2024 and sell it today you would earn a total of 260.00 from holding Pexip Holding ASA or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elkem ASA vs. Pexip Holding ASA
Performance |
| Timeline |
| Elkem ASA |
| Pexip Holding ASA |
Elkem ASA and Pexip Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elkem ASA and Pexip Holding
The main advantage of trading using opposite Elkem ASA and Pexip Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elkem ASA 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.| Elkem ASA vs. Storebrand ASA | Elkem ASA vs. Yara International ASA | Elkem ASA vs. Lery Seafood Group | Elkem ASA vs. DnB ASA |
| Pexip Holding vs. Elliptic Laboratories AS | Pexip Holding vs. Huddlestock Fintech As | Pexip Holding vs. Elkem ASA | Pexip Holding vs. DNB NOR KAPFORV |
Check out your portfolio center.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 CEOs Directory module to screen CEOs from public companies around the world.
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