Correlation Between XXL ASA and Pexip Holding
Can any of the company-specific risk be diversified away by investing in both XXL 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 XXL 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 XXL ASA and Pexip Holding ASA, you can compare the effects of market volatilities on XXL 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 XXL ASA with a short position of Pexip Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of XXL ASA and Pexip Holding.
Diversification Opportunities for XXL ASA and Pexip Holding
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XXL and Pexip is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding XXL 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 XXL 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 XXL 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 XXL ASA i.e., XXL ASA and Pexip Holding go up and down completely randomly.
Pair Corralation between XXL ASA and Pexip Holding
Assuming the 90 days trading horizon XXL ASA is expected to under-perform the Pexip Holding. In addition to that, XXL ASA is 7.45 times more volatile than Pexip Holding ASA. It trades about -0.36 of its total potential returns per unit of risk. Pexip Holding ASA is currently generating about 0.12 per unit of volatility. If you would invest 4,275 in Pexip Holding ASA on September 1, 2024 and sell it today you would earn a total of 240.00 from holding Pexip Holding ASA or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XXL ASA vs. Pexip Holding ASA
Performance |
| Timeline |
| XXL ASA |
| Pexip Holding ASA |
XXL ASA and Pexip Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XXL ASA and Pexip Holding
The main advantage of trading using opposite XXL ASA and Pexip Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XXL 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.The idea behind XXL ASA 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.| Pexip Holding vs. Elliptic Laboratories AS | Pexip Holding vs. Huddlestock Fintech As | Pexip Holding vs. Elkem ASA | Pexip Holding vs. Integrated Wind Solutions |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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