Correlation Between Hexatronic Group and JonDeTech Sensors
Can any of the company-specific risk be diversified away by investing in both Hexatronic Group and JonDeTech Sensors 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 JonDeTech Sensors 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 JonDeTech Sensors, you can compare the effects of market volatilities on Hexatronic Group and JonDeTech Sensors 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 JonDeTech Sensors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and JonDeTech Sensors.
Diversification Opportunities for Hexatronic Group and JonDeTech Sensors
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hexatronic and JonDeTech is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and JonDeTech Sensors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JonDeTech Sensors 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 JonDeTech Sensors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JonDeTech Sensors has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and JonDeTech Sensors go up and down completely randomly.
Pair Corralation between Hexatronic Group and JonDeTech Sensors
Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the JonDeTech Sensors. But the stock apears to be less risky and, when comparing its historical volatility, Hexatronic Group AB is 3.53 times less risky than JonDeTech Sensors. The stock trades about -0.29 of its potential returns per unit of risk. The JonDeTech Sensors is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 258.00 in JonDeTech Sensors on September 1, 2024 and sell it today you would earn a total of 36.00 from holding JonDeTech Sensors or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexatronic Group AB vs. JonDeTech Sensors
Performance |
| Timeline |
| Hexatronic Group |
| JonDeTech Sensors |
Hexatronic Group and JonDeTech Sensors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexatronic Group and JonDeTech Sensors
The main advantage of trading using opposite Hexatronic Group and JonDeTech Sensors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexatronic Group position performs unexpectedly, JonDeTech Sensors 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 JonDeTech Sensors will offset losses from the drop in JonDeTech Sensors' long position.| Hexatronic Group vs. Samhllsbyggnadsbolaget i Norden | Hexatronic Group vs. Sinch AB | Hexatronic Group vs. Embracer Group AB | Hexatronic Group vs. Evolution AB |
| JonDeTech Sensors vs. Divio Technologies AB | JonDeTech Sensors vs. XMReality AB | JonDeTech Sensors vs. KABE Group AB | JonDeTech Sensors vs. IAR Systems Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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