Correlation Between Pexip Holding and North Energy
Can any of the company-specific risk be diversified away by investing in both Pexip Holding and North Energy 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 Pexip Holding and North Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pexip Holding ASA and North Energy ASA, you can compare the effects of market volatilities on Pexip Holding and North Energy 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 Pexip Holding with a short position of North Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pexip Holding and North Energy.
Diversification Opportunities for Pexip Holding and North Energy
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pexip and North is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pexip Holding ASA and North Energy ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Energy ASA and Pexip Holding 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 Pexip Holding ASA are associated (or correlated) with North Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Energy ASA has no effect on the direction of Pexip Holding i.e., Pexip Holding and North Energy go up and down completely randomly.
Pair Corralation between Pexip Holding and North Energy
Assuming the 90 days trading horizon Pexip Holding ASA is expected to generate 0.93 times more return on investment than North Energy. However, Pexip Holding ASA is 1.08 times less risky than North Energy. It trades about 0.16 of its potential returns per unit of risk. North Energy ASA is currently generating about 0.06 per unit of risk. If you would invest 3,030 in Pexip Holding ASA on September 1, 2024 and sell it today you would earn a total of 1,485 from holding Pexip Holding ASA or generate 49.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.24% |
| Values | Daily Returns |
Pexip Holding ASA vs. North Energy ASA
Performance |
| Timeline |
| Pexip Holding ASA |
| North Energy ASA |
Pexip Holding and North Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pexip Holding and North Energy
The main advantage of trading using opposite Pexip Holding and North Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pexip Holding position performs unexpectedly, North Energy 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 North Energy will offset losses from the drop in North Energy's long position.| Pexip Holding vs. Elliptic Laboratories AS | Pexip Holding vs. Huddlestock Fintech As | Pexip Holding vs. Elkem ASA | Pexip Holding vs. Integrated Wind Solutions |
| North Energy vs. Skue Sparebank | North Energy vs. Aasen Sparebank | North Energy vs. Proximar Seafood AS | North Energy vs. Nidaros Sparebank |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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