Correlation Between Hexatronic Group and Nepa AB
Can any of the company-specific risk be diversified away by investing in both Hexatronic Group and Nepa 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 Nepa 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 Nepa AB, you can compare the effects of market volatilities on Hexatronic Group and Nepa 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 Nepa AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and Nepa AB.
Diversification Opportunities for Hexatronic Group and Nepa AB
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hexatronic and Nepa is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and Nepa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nepa 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 Nepa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nepa AB has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and Nepa AB go up and down completely randomly.
Pair Corralation between Hexatronic Group and Nepa AB
Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the Nepa AB. In addition to that, Hexatronic Group is 1.24 times more volatile than Nepa AB. It trades about -0.17 of its total potential returns per unit of risk. Nepa AB is currently generating about 0.03 per unit of volatility. If you would invest 1,920 in Nepa AB on August 25, 2024 and sell it today you would earn a total of 40.00 from holding Nepa AB or generate 2.08% 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. Nepa AB
Performance |
| Timeline |
| Hexatronic Group |
| Nepa AB |
Hexatronic Group and Nepa AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexatronic Group and Nepa AB
The main advantage of trading using opposite Hexatronic Group and Nepa AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexatronic Group position performs unexpectedly, Nepa 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 Nepa AB will offset losses from the drop in Nepa AB'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 |
| Nepa AB vs. MAG Interactive AB | Nepa AB vs. Kambi Group PLC | Nepa AB vs. Hexatronic Group AB | Nepa AB vs. Integrum AB Series |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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