Correlation Between Hexagon Composites and REC Silicon
Can any of the company-specific risk be diversified away by investing in both Hexagon Composites and REC Silicon 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 Hexagon Composites and REC Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexagon Composites ASA and REC Silicon ASA, you can compare the effects of market volatilities on Hexagon Composites and REC Silicon 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 Hexagon Composites with a short position of REC Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexagon Composites and REC Silicon.
Diversification Opportunities for Hexagon Composites and REC Silicon
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hexagon and REC is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hexagon Composites ASA and REC Silicon ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REC Silicon ASA and Hexagon Composites 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 Hexagon Composites ASA are associated (or correlated) with REC Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REC Silicon ASA has no effect on the direction of Hexagon Composites i.e., Hexagon Composites and REC Silicon go up and down completely randomly.
Pair Corralation between Hexagon Composites and REC Silicon
Assuming the 90 days trading horizon Hexagon Composites ASA is expected to generate 0.53 times more return on investment than REC Silicon. However, Hexagon Composites ASA is 1.9 times less risky than REC Silicon. It trades about 0.13 of its potential returns per unit of risk. REC Silicon ASA is currently generating about -0.29 per unit of risk. If you would invest 4,040 in Hexagon Composites ASA on August 28, 2024 and sell it today you would earn a total of 440.00 from holding Hexagon Composites ASA or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexagon Composites ASA vs. REC Silicon ASA
Performance |
| Timeline |
| Hexagon Composites ASA |
| REC Silicon ASA |
Hexagon Composites and REC Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexagon Composites and REC Silicon
The main advantage of trading using opposite Hexagon Composites and REC Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexagon Composites position performs unexpectedly, REC Silicon 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 REC Silicon will offset losses from the drop in REC Silicon's long position.| Hexagon Composites vs. Hexagon Purus As | Hexagon Composites vs. Nel ASA | Hexagon Composites vs. Powercell Sweden | Hexagon Composites vs. Tomra Systems ASA |
| REC Silicon vs. Aker Horizons AS | REC Silicon vs. MPC Container Ships | REC Silicon vs. Aker Carbon Capture | REC Silicon vs. Nordic Semiconductor ASA |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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