Correlation Between Hexatronic Group and SBB-B
Can any of the company-specific risk be diversified away by investing in both Hexatronic Group and SBB-B 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 SBB-B 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 Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Hexatronic Group and SBB-B 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 SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and SBB-B.
Diversification Opportunities for Hexatronic Group and SBB-B
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hexatronic and SBB-B is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget 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 SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and SBB-B go up and down completely randomly.
Pair Corralation between Hexatronic Group and SBB-B
Assuming the 90 days trading horizon Hexatronic Group AB is expected to generate 0.4 times more return on investment than SBB-B. However, Hexatronic Group AB is 2.51 times less risky than SBB-B. It trades about -0.41 of its potential returns per unit of risk. Samhllsbyggnadsbolaget i Norden is currently generating about -0.23 per unit of risk. If you would invest 4,551 in Hexatronic Group AB on August 30, 2024 and sell it today you would lose (855.00) from holding Hexatronic Group AB or give up 18.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexatronic Group AB vs. Samhllsbyggnadsbolaget i Norde
Performance |
| Timeline |
| Hexatronic Group |
| Samhllsbyggnadsbolaget |
Hexatronic Group and SBB-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexatronic Group and SBB-B
The main advantage of trading using opposite Hexatronic Group and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexatronic Group position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B's long position.| Hexatronic Group vs. Troax Group AB | Hexatronic Group vs. NIBE Industrier AB | Hexatronic Group vs. Bufab Holding AB | Hexatronic Group vs. MIPS 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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