Correlation Between Hexatronic Group and NOTE AB
Can any of the company-specific risk be diversified away by investing in both Hexatronic Group and NOTE 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 NOTE 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 NOTE AB, you can compare the effects of market volatilities on Hexatronic Group and NOTE 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 NOTE AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and NOTE AB.
Diversification Opportunities for Hexatronic Group and NOTE AB
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hexatronic and NOTE is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and NOTE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOTE 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 NOTE AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOTE AB has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and NOTE AB go up and down completely randomly.
Pair Corralation between Hexatronic Group and NOTE AB
Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the NOTE AB. In addition to that, Hexatronic Group is 1.41 times more volatile than NOTE AB. It trades about -0.39 of its total potential returns per unit of risk. NOTE AB is currently generating about -0.04 per unit of volatility. If you would invest 13,300 in NOTE AB on August 27, 2024 and sell it today you would lose (180.00) from holding NOTE AB or give up 1.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hexatronic Group AB vs. NOTE AB
Performance |
Timeline |
Hexatronic Group |
NOTE AB |
Hexatronic Group and NOTE AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hexatronic Group and NOTE AB
The main advantage of trading using opposite Hexatronic Group and NOTE AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexatronic Group position performs unexpectedly, NOTE 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 NOTE AB will offset losses from the drop in NOTE 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 |
NOTE AB vs. Swedbank AB | NOTE AB vs. Fractal Gaming Group | NOTE AB vs. JLT Mobile Computers | NOTE AB vs. Flexion Mobile PLC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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