Correlation Between Polight ASA and Elliptic Laboratories

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

By analyzing existing cross correlation between Polight ASA and Elliptic Laboratories AS, you can compare the effects of market volatilities on Polight ASA and Elliptic Laboratories 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 Elliptic Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polight ASA and Elliptic Laboratories.

Diversification Opportunities for Polight ASA and Elliptic Laboratories

0.24

Correlation Coefficient

Polight ASA  Elliptic Laboratories

Modest diversification

The 3 months correlation between Polight and Elliptic is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Polight ASA and Elliptic Laboratories AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elliptic Laboratories 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 Elliptic Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elliptic Laboratories has no effect on the direction of Polight ASA i.e., Polight ASA and Elliptic Laboratories go up and down completely randomly.

Pair Corralation between Polight ASA and Elliptic Laboratories

Assuming the 90 days trading horizon Polight ASA is expected to generate 4.96 times less return on investment than Elliptic Laboratories. In addition to that, Polight ASA is 1.23 times more volatile than Elliptic Laboratories AS. It trades about 0.03 of its total potential returns per unit of risk. Elliptic Laboratories AS is currently generating about 0.18 per unit of volatility. If you would invest  916.00  in Elliptic Laboratories AS on April 24, 2025 and sell it today you would earn a total of  404.00  from holding Elliptic Laboratories AS or generate 44.1% return on investment over 90 days.

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

Polight ASA  vs.  Elliptic Laboratories AS

Polight ASA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Polight ASA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Polight ASA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 14 (%) 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.

Pair Trading with Polight ASA and Elliptic Laboratories

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

The idea behind Polight ASA and Elliptic Laboratories AS 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 Stocks Directory module to find actively traded stocks across global markets.