Correlation Between Hexatronic Group and Hanza AB
Can any of the company-specific risk be diversified away by investing in both Hexatronic Group and Hanza 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 Hexatronic Group and Hanza AB 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 Hanza AB, you can compare the effects of market volatilities on Hexatronic Group and Hanza 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 Hexatronic Group with a short position of Hanza AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and Hanza AB.
Diversification Opportunities for Hexatronic Group and Hanza AB
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hexatronic and Hanza is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and Hanza AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanza 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 Hanza AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanza AB has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and Hanza AB go up and down completely randomly.
Pair Corralation between Hexatronic Group and Hanza AB
Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the Hanza AB. In addition to that, Hexatronic Group is 1.89 times more volatile than Hanza AB. It trades about -0.04 of its total potential returns per unit of risk. Hanza AB is currently generating about 0.04 per unit of volatility. If you would invest 4,861 in Hanza AB on August 30, 2024 and sell it today you would earn a total of 1,829 from holding Hanza AB or generate 37.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexatronic Group AB vs. Hanza AB
Performance |
| Timeline |
| Hexatronic Group |
| Hanza AB |
Hexatronic Group and Hanza AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexatronic Group and Hanza AB
The main advantage of trading using opposite Hexatronic Group and Hanza AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexatronic Group position performs unexpectedly, Hanza 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 Hanza AB will offset losses from the drop in Hanza AB'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 |
| Hanza AB vs. Hexatronic Group AB | Hanza AB vs. Instalco Intressenter AB | Hanza AB vs. NOTE AB | Hanza AB vs. Dometic 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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