Correlation Between Hexa Tradex and Allied Blenders

Can any of the company-specific risk be diversified away by investing in both Hexa Tradex and Allied Blenders 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 Hexa Tradex and Allied Blenders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hexa Tradex Limited and Allied Blenders Distillers, you can compare the effects of market volatilities on Hexa Tradex and Allied Blenders 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 Hexa Tradex with a short position of Allied Blenders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexa Tradex and Allied Blenders.

Diversification Opportunities for Hexa Tradex and Allied Blenders

0.68

Correlation Coefficient

Hexa Tradex  Allied Blenders

Poor diversification

The 3 months correlation between Hexa and Allied is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hexa Tradex Limited and Allied Blenders Distillers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Blenders Dist and Hexa Tradex 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 Hexa Tradex Limited are associated (or correlated) with Allied Blenders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Blenders Dist has no effect on the direction of Hexa Tradex i.e., Hexa Tradex and Allied Blenders go up and down completely randomly.

Pair Corralation between Hexa Tradex and Allied Blenders

Assuming the 90 days trading horizon Hexa Tradex Limited is expected to under-perform the Allied Blenders. In addition to that, Hexa Tradex is 1.44 times more volatile than Allied Blenders Distillers. It trades about -0.14 of its total potential returns per unit of risk. Allied Blenders Distillers is currently generating about -0.17 per unit of volatility. If you would invest  42,240  in Allied Blenders Distillers on December 25, 2024 and sell it today you would lose (10,485) from holding Allied Blenders Distillers or give up 24.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Hexa Tradex Limited  vs.  Allied Blenders Distillers

Hexa Tradex Limited

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Allied Blenders Dist

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allied Blenders Distillers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hexa Tradex and Allied Blenders

The main advantage of trading using opposite Hexa Tradex and Allied Blenders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexa Tradex position performs unexpectedly, Allied Blenders 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 Allied Blenders will offset losses from the drop in Allied Blenders' long position.

The idea behind Hexa Tradex Limited and Allied Blenders Distillers 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.