Correlation Between Hexatronic Group and Waystream Holding
Can any of the company-specific risk be diversified away by investing in both Hexatronic Group and Waystream Holding 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 Waystream Holding 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 Waystream Holding AB, you can compare the effects of market volatilities on Hexatronic Group and Waystream Holding 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 Waystream Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and Waystream Holding.
Diversification Opportunities for Hexatronic Group and Waystream Holding
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hexatronic and Waystream is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and Waystream Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waystream Holding 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 Waystream Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waystream Holding has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and Waystream Holding go up and down completely randomly.
Pair Corralation between Hexatronic Group and Waystream Holding
Assuming the 90 days trading horizon Hexatronic Group AB is expected to generate 1.02 times more return on investment than Waystream Holding. However, Hexatronic Group is 1.02 times more volatile than Waystream Holding AB. It trades about -0.01 of its potential returns per unit of risk. Waystream Holding AB is currently generating about -0.05 per unit of risk. If you would invest 4,445 in Hexatronic Group AB on September 2, 2024 and sell it today you would lose (684.00) from holding Hexatronic Group AB or give up 15.39% 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. Waystream Holding AB
Performance |
| Timeline |
| Hexatronic Group |
| Waystream Holding |
Hexatronic Group and Waystream Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexatronic Group and Waystream Holding
The main advantage of trading using opposite Hexatronic Group and Waystream Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexatronic Group position performs unexpectedly, Waystream Holding 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 Waystream Holding will offset losses from the drop in Waystream Holding's long position.| Hexatronic Group vs. Samhllsbyggnadsbolaget i Norden | Hexatronic Group vs. Sinch AB | Hexatronic Group vs. Embracer Group AB | Hexatronic Group vs. Evolution AB |
| Waystream Holding vs. SaltX Technology Holding | Waystream Holding vs. Acconeer AB | Waystream Holding vs. GomSpace Group AB | Waystream Holding vs. KABE 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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