Correlation Between Microvision and Hexagon AB
Can any of the company-specific risk be diversified away by investing in both Microvision and Hexagon 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 Microvision and Hexagon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microvision and Hexagon AB, you can compare the effects of market volatilities on Microvision and Hexagon 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 Microvision with a short position of Hexagon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvision and Hexagon AB.
Diversification Opportunities for Microvision and Hexagon AB
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Microvision and Hexagon is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Microvision and Hexagon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexagon AB and Microvision 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 Microvision are associated (or correlated) with Hexagon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexagon AB has no effect on the direction of Microvision i.e., Microvision and Hexagon AB go up and down completely randomly.
Pair Corralation between Microvision and Hexagon AB
Given the investment horizon of 90 days Microvision is expected to generate 4.7 times less return on investment than Hexagon AB. In addition to that, Microvision is 1.58 times more volatile than Hexagon AB. It trades about 0.04 of its total potential returns per unit of risk. Hexagon AB is currently generating about 0.32 per unit of volatility. If you would invest 841.00 in Hexagon AB on September 22, 2024 and sell it today you would earn a total of 159.00 from holding Hexagon AB or generate 18.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microvision vs. Hexagon AB
Performance |
| Timeline |
| Microvision |
| Hexagon AB |
Microvision and Hexagon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microvision and Hexagon AB
The main advantage of trading using opposite Microvision and Hexagon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvision position performs unexpectedly, Hexagon 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 Hexagon AB will offset losses from the drop in Hexagon AB's long position.| Microvision vs. Focus Universal | Microvision vs. ESCO Technologies | Microvision vs. Genasys | Microvision vs. Cepton Inc |
| Hexagon AB vs. Mind Technology | Hexagon AB vs. Wrap Technologies | Hexagon AB vs. Cepton Inc | Hexagon AB vs. Microvision |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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