Correlation Between CellaVision and Hexagon AB
Can any of the company-specific risk be diversified away by investing in both CellaVision and Hexagon AB 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 CellaVision and Hexagon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CellaVision AB and Hexagon AB, you can compare the effects of market volatilities on CellaVision and Hexagon AB 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 CellaVision with a short position of Hexagon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CellaVision and Hexagon AB.
Diversification Opportunities for CellaVision and Hexagon AB
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CellaVision and Hexagon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CellaVision AB and Hexagon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexagon AB and CellaVision 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 CellaVision AB are associated (or correlated) with Hexagon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexagon AB has no effect on the direction of CellaVision i.e., CellaVision and Hexagon AB go up and down completely randomly.
Pair Corralation between CellaVision and Hexagon AB
Assuming the 90 days trading horizon CellaVision AB is expected to generate 1.42 times more return on investment than Hexagon AB. However, CellaVision is 1.42 times more volatile than Hexagon AB. It trades about -0.06 of its potential returns per unit of risk. Hexagon AB is currently generating about -0.1 per unit of risk. If you would invest 27,000 in CellaVision AB on August 31, 2024 and sell it today you would lose (5,150) from holding CellaVision AB or give up 19.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CellaVision AB vs. Hexagon AB
Performance |
| Timeline |
| CellaVision AB |
| Hexagon AB |
CellaVision and Hexagon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CellaVision and Hexagon AB
The main advantage of trading using opposite CellaVision and Hexagon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CellaVision position performs unexpectedly, Hexagon AB 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 Hexagon AB will offset losses from the drop in Hexagon AB's long position.| CellaVision vs. Cantargia AB | CellaVision vs. BioArctic AB | CellaVision vs. Oncopeptides AB | CellaVision vs. Hansa Biopharma AB |
| Hexagon AB vs. Impact Coatings publ | Hexagon AB vs. Catella AB | Hexagon AB vs. Lidds AB | Hexagon AB vs. CellaVision AB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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