Correlation Between Hexa Tradex and Byke Hospitality

Can any of the company-specific risk be diversified away by investing in both Hexa Tradex and Byke Hospitality 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 Byke Hospitality 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 The Byke Hospitality, you can compare the effects of market volatilities on Hexa Tradex and Byke Hospitality 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 Byke Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexa Tradex and Byke Hospitality.

Diversification Opportunities for Hexa Tradex and Byke Hospitality

0.54

Correlation Coefficient

Hexa Tradex  Byke Hospitality

Very weak diversification

The 3 months correlation between Hexa and Byke is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hexa Tradex Limited and The Byke Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byke Hospitality 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 Byke Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byke Hospitality has no effect on the direction of Hexa Tradex i.e., Hexa Tradex and Byke Hospitality go up and down completely randomly.

Pair Corralation between Hexa Tradex and Byke Hospitality

Assuming the 90 days trading horizon Hexa Tradex Limited is expected to generate 2.15 times more return on investment than Byke Hospitality. However, Hexa Tradex is 2.15 times more volatile than The Byke Hospitality. It trades about 0.16 of its potential returns per unit of risk. The Byke Hospitality is currently generating about -0.47 per unit of risk. If you would invest  19,085  in Hexa Tradex Limited on December 2, 2024 and sell it today you would earn a total of  2,834  from holding Hexa Tradex Limited or generate 14.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hexa Tradex Limited  vs.  The Byke Hospitality

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 unsteady 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.

Byke Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Byke Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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 Byke Hospitality

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

The idea behind Hexa Tradex Limited and The Byke Hospitality 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.