Correlation Between Hexagon AB and Safello Group
Can any of the company-specific risk be diversified away by investing in both Hexagon AB and Safello Group 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 AB and Safello Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexagon AB and Safello Group AB, you can compare the effects of market volatilities on Hexagon AB and Safello Group 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 AB with a short position of Safello Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexagon AB and Safello Group.
Diversification Opportunities for Hexagon AB and Safello Group
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hexagon and Safello is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hexagon AB and Safello Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safello Group AB and Hexagon AB 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 AB are associated (or correlated) with Safello Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safello Group AB has no effect on the direction of Hexagon AB i.e., Hexagon AB and Safello Group go up and down completely randomly.
Pair Corralation between Hexagon AB and Safello Group
Assuming the 90 days trading horizon Hexagon AB is expected to under-perform the Safello Group. But the stock apears to be less risky and, when comparing its historical volatility, Hexagon AB is 3.57 times less risky than Safello Group. The stock trades about -0.02 of its potential returns per unit of risk. The Safello Group AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Safello Group AB on September 1, 2024 and sell it today you would earn a total of 202.00 from holding Safello Group AB or generate 50.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexagon AB vs. Safello Group AB
Performance |
| Timeline |
| Hexagon AB |
| Safello Group AB |
Hexagon AB and Safello Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexagon AB and Safello Group
The main advantage of trading using opposite Hexagon AB and Safello Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexagon AB position performs unexpectedly, Safello Group 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 Safello Group will offset losses from the drop in Safello Group's long position.| Hexagon AB vs. ASSA ABLOY AB | Hexagon AB vs. Sandvik AB | Hexagon AB vs. Investor AB ser | Hexagon AB vs. NIBE Industrier AB |
| Safello Group vs. Goobit Group AB | Safello Group vs. CoinShares International | Safello Group vs. Zignsec AB | Safello Group vs. Checkin Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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