Correlation Between Hexatronic Group and CellaVision
Can any of the company-specific risk be diversified away by investing in both Hexatronic Group and CellaVision 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 Hexatronic Group and CellaVision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexatronic Group AB and CellaVision AB, you can compare the effects of market volatilities on Hexatronic Group and CellaVision 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 Hexatronic Group with a short position of CellaVision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and CellaVision.
Diversification Opportunities for Hexatronic Group and CellaVision
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hexatronic and CellaVision is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and CellaVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CellaVision AB and Hexatronic Group 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 Hexatronic Group AB are associated (or correlated) with CellaVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CellaVision AB has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and CellaVision go up and down completely randomly.
Pair Corralation between Hexatronic Group and CellaVision
Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the CellaVision. In addition to that, Hexatronic Group is 1.62 times more volatile than CellaVision AB. It trades about -0.01 of its total potential returns per unit of risk. CellaVision AB is currently generating about 0.03 per unit of volatility. If you would invest 17,116 in CellaVision AB on August 26, 2024 and sell it today you would earn a total of 4,584 from holding CellaVision AB or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexatronic Group AB vs. CellaVision AB
Performance |
| Timeline |
| Hexatronic Group |
| CellaVision AB |
Hexatronic Group and CellaVision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexatronic Group and CellaVision
The main advantage of trading using opposite Hexatronic Group and CellaVision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexatronic Group position performs unexpectedly, CellaVision 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 CellaVision will offset losses from the drop in CellaVision's long position.| Hexatronic Group vs. Addtech AB | Hexatronic Group vs. Teqnion AB | Hexatronic Group vs. Vitec Software Group | Hexatronic Group vs. Lagercrantz 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |