Correlation Between Troax Group and Hexatronic Group
Can any of the company-specific risk be diversified away by investing in both Troax Group 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 Troax Group and Hexatronic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Troax Group AB and Hexatronic Group AB, you can compare the effects of market volatilities on Troax Group 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 Troax Group with a short position of Hexatronic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Troax Group and Hexatronic Group.
Diversification Opportunities for Troax Group and Hexatronic Group
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Troax and Hexatronic is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Troax Group 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 Troax 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 Troax Group 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 Troax Group i.e., Troax Group and Hexatronic Group go up and down completely randomly.
Pair Corralation between Troax Group and Hexatronic Group
Assuming the 90 days trading horizon Troax Group AB is expected to generate 0.82 times more return on investment than Hexatronic Group. However, Troax Group AB is 1.22 times less risky than Hexatronic Group. It trades about -0.08 of its potential returns per unit of risk. Hexatronic Group AB is currently generating about -0.44 per unit of risk. If you would invest 21,500 in Troax Group AB on August 29, 2024 and sell it today you would lose (750.00) from holding Troax Group AB or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Troax Group AB vs. Hexatronic Group AB
Performance |
| Timeline |
| Troax Group AB |
| Hexatronic Group |
Troax Group and Hexatronic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Troax Group and Hexatronic Group
The main advantage of trading using opposite Troax Group and Hexatronic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Troax Group 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.| Troax Group vs. Addtech AB | Troax Group vs. Teqnion AB | Troax Group vs. Vitec Software Group | Troax Group vs. Lagercrantz Group AB |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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