Correlation Between Hexatronic Group and Evolution
Can any of the company-specific risk be diversified away by investing in both Hexatronic Group and Evolution 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 Evolution 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 Evolution AB, you can compare the effects of market volatilities on Hexatronic Group and Evolution 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 Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and Evolution.
Diversification Opportunities for Hexatronic Group and Evolution
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hexatronic and Evolution is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and Evolution AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution 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 Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution AB has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and Evolution go up and down completely randomly.
Pair Corralation between Hexatronic Group and Evolution
Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the Evolution. In addition to that, Hexatronic Group is 1.25 times more volatile than Evolution AB. It trades about -0.22 of its total potential returns per unit of risk. Evolution AB is currently generating about 0.0 per unit of volatility. If you would invest 99,800 in Evolution AB on August 30, 2024 and sell it today you would lose (1,120) from holding Evolution AB or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexatronic Group AB vs. Evolution AB
Performance |
| Timeline |
| Hexatronic Group |
| Evolution AB |
Hexatronic Group and Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexatronic Group and Evolution
The main advantage of trading using opposite Hexatronic Group and Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexatronic Group position performs unexpectedly, Evolution 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 Evolution will offset losses from the drop in Evolution's long position.| Hexatronic Group vs. Samhllsbyggnadsbolaget i Norden | Hexatronic Group vs. Sinch AB | Hexatronic Group vs. Embracer Group AB | Hexatronic Group vs. Evolution AB |
| Evolution vs. Embracer Group AB | Evolution vs. Sinch AB | Evolution vs. Kambi Group PLC | Evolution vs. Samhllsbyggnadsbolaget i Norden |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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