Correlation Between Hexatronic Group and W5 Solutions
Can any of the company-specific risk be diversified away by investing in both Hexatronic Group and W5 Solutions 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 W5 Solutions 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 W5 Solutions AB, you can compare the effects of market volatilities on Hexatronic Group and W5 Solutions 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 W5 Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and W5 Solutions.
Diversification Opportunities for Hexatronic Group and W5 Solutions
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hexatronic and W5 Solutions is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and W5 Solutions AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W5 Solutions 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 W5 Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W5 Solutions AB has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and W5 Solutions go up and down completely randomly.
Pair Corralation between Hexatronic Group and W5 Solutions
Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the W5 Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Hexatronic Group AB is 1.13 times less risky than W5 Solutions. The stock trades about -0.03 of its potential returns per unit of risk. The W5 Solutions AB is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 4,510 in W5 Solutions AB on October 25, 2024 and sell it today you would earn a total of 1,060 from holding W5 Solutions AB or generate 23.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Hexatronic Group AB vs. W5 Solutions AB
Performance |
| Timeline |
| Hexatronic Group |
| W5 Solutions AB |
Hexatronic Group and W5 Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexatronic Group and W5 Solutions
The main advantage of trading using opposite Hexatronic Group and W5 Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexatronic Group position performs unexpectedly, W5 Solutions 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 W5 Solutions will offset losses from the drop in W5 Solutions' long position.| Hexatronic Group vs. Samhllsbyggnadsbolaget i Norden | Hexatronic Group vs. Sinch AB | Hexatronic Group vs. Embracer Group AB | Hexatronic Group vs. Evolution AB |
| W5 Solutions vs. Truecaller AB | W5 Solutions vs. MilDef Group AB | W5 Solutions vs. NCAB Group | W5 Solutions vs. Hexatronic 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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