Correlation Between Elliptic Laboratories and Polight ASA

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

Diversification Opportunities for Elliptic Laboratories and Polight ASA

0.31

Correlation Coefficient

Elliptic Laboratories  Polight ASA

Weak diversification

The 3 months correlation between Elliptic and Polight is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Elliptic Laboratories AS and Polight ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polight 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 Polight ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polight ASA has no effect on the direction of Elliptic Laboratories i.e., Elliptic Laboratories and Polight ASA go up and down completely randomly.

Pair Corralation between Elliptic Laboratories and Polight ASA

Assuming the 90 days trading horizon Elliptic Laboratories AS is expected to generate 0.8 times more return on investment than Polight ASA. However, Elliptic Laboratories AS is 1.25 times less risky than Polight ASA. It trades about 0.17 of its potential returns per unit of risk. Polight ASA is currently generating about 0.01 per unit of risk. If you would invest  943.00  in Elliptic Laboratories AS on April 23, 2025 and sell it today you would earn a total of  389.00  from holding Elliptic Laboratories AS or generate 41.25% return on investment over 90 days.

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

Elliptic Laboratories AS  vs.  Polight ASA

Elliptic Laboratories

Risk-Adjusted Performance

Good

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

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 quite persistent basic indicators, Polight ASA is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Elliptic Laboratories and Polight ASA

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

The idea behind Elliptic Laboratories AS and Polight 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.