Correlation Between Pegasus Digital and Elkhorn

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

By analyzing existing cross correlation between Pegasus Digital Mobility and Elkhorn, you can compare the effects of market volatilities on Pegasus Digital and Elkhorn 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 Pegasus Digital with a short position of Elkhorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pegasus Digital and Elkhorn.

Diversification Opportunities for Pegasus Digital and Elkhorn

-0.03

Correlation Coefficient

Pegasus Digital  Elkhorn

Good diversification

The 3 months correlation between Pegasus and Elkhorn is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pegasus Digital Mobility and Elkhorn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elkhorn and Pegasus Digital 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 Pegasus Digital Mobility are associated (or correlated) with Elkhorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elkhorn has no effect on the direction of Pegasus Digital i.e., Pegasus Digital and Elkhorn go up and down completely randomly.

Pair Corralation between Pegasus Digital and Elkhorn

If you would invest  5,799  in Elkhorn on February 16, 2024 and sell it today you would earn a total of  0.00  from holding Elkhorn or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	8.33%
Values	Daily Returns

Pegasus Digital Mobility  vs.  Elkhorn

Pegasus Digital Mobility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pegasus Digital Mobility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Elkhorn

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Elkhorn has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak basic indicators, Elkhorn exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pegasus Digital and Elkhorn

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

The idea behind Pegasus Digital Mobility and Elkhorn 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.