Correlation Between Inwido AB and Hexatronic Group
Can any of the company-specific risk be diversified away by investing in both Inwido AB and Hexatronic Group 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 Inwido AB and Hexatronic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inwido AB and Hexatronic Group AB, you can compare the effects of market volatilities on Inwido AB and Hexatronic Group 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 Inwido AB with a short position of Hexatronic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Hexatronic Group.
Diversification Opportunities for Inwido AB and Hexatronic Group
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inwido and Hexatronic is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Hexatronic Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexatronic Group and Inwido AB 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 Inwido AB are associated (or correlated) with Hexatronic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexatronic Group has no effect on the direction of Inwido AB i.e., Inwido AB and Hexatronic Group go up and down completely randomly.
Pair Corralation between Inwido AB and Hexatronic Group
Assuming the 90 days trading horizon Inwido AB is expected to generate 1.34 times less return on investment than Hexatronic Group. But when comparing it to its historical volatility, Inwido AB is 2.54 times less risky than Hexatronic Group. It trades about 0.13 of its potential returns per unit of risk. Hexatronic Group AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,162 in Hexatronic Group AB on November 3, 2024 and sell it today you would earn a total of 1,483 from holding Hexatronic Group AB or generate 68.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inwido AB vs. Hexatronic Group AB
Performance |
| Timeline |
| Inwido AB |
| Hexatronic Group |
Inwido AB and Hexatronic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Hexatronic Group
The main advantage of trading using opposite Inwido AB and Hexatronic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB position performs unexpectedly, Hexatronic Group 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 Hexatronic Group will offset losses from the drop in Hexatronic Group's long position.| Inwido AB vs. USWE Sports AB | Inwido AB vs. Scandic Hotels Group | Inwido AB vs. FormPipe Software AB | Inwido AB vs. COOR Service Management |
| Hexatronic Group vs. Samhllsbyggnadsbolaget i Norden | Hexatronic Group vs. Sinch AB | Hexatronic Group vs. Embracer Group AB | Hexatronic Group vs. Evolution 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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