Correlation Between Power Finance and Hexa Tradex

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Power Finance and Hexa Tradex 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 Power Finance and Hexa Tradex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Finance and Hexa Tradex Limited, you can compare the effects of market volatilities on Power Finance and Hexa Tradex 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 Power Finance with a short position of Hexa Tradex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Finance and Hexa Tradex.

Diversification Opportunities for Power Finance and Hexa Tradex

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between Power and Hexa is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Power Finance and Hexa Tradex Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexa Tradex Limited and Power Finance 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 Power Finance are associated (or correlated) with Hexa Tradex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexa Tradex Limited has no effect on the direction of Power Finance i.e., Power Finance and Hexa Tradex go up and down completely randomly.

Pair Corralation between Power Finance and Hexa Tradex

Assuming the 90 days trading horizon Power Finance is expected to generate 1.5 times more return on investment than Hexa Tradex. However, Power Finance is 1.5 times more volatile than Hexa Tradex Limited. It trades about 0.1 of its potential returns per unit of risk. Hexa Tradex Limited is currently generating about 0.04 per unit of risk. If you would invest  10,297  in Power Finance on October 25, 2024 and sell it today you would earn a total of  31,763  from holding Power Finance or generate 308.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

Power Finance  vs.  Hexa Tradex Limited

 Performance 
       Timeline  
Power Finance 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Power Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Power Finance is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Hexa Tradex Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hexa Tradex Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Power Finance and Hexa Tradex Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Power Finance and Hexa Tradex

The main advantage of trading using opposite Power Finance and Hexa Tradex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Finance position performs unexpectedly, Hexa Tradex 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 Hexa Tradex will offset losses from the drop in Hexa Tradex's long position.
The idea behind Power Finance and Hexa Tradex Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios