Correlation Between Hexa Tradex and Central Bank

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

Diversification Opportunities for Hexa Tradex and Central Bank

0.69

Correlation Coefficient

Hexa Tradex  Central Bank

Poor diversification

The 3 months correlation between Hexa and Central is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hexa Tradex Limited and Central Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Bank 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 Central Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Bank has no effect on the direction of Hexa Tradex i.e., Hexa Tradex and Central Bank go up and down completely randomly.

Pair Corralation between Hexa Tradex and Central Bank

Assuming the 90 days trading horizon Hexa Tradex Limited is expected to generate 0.92 times more return on investment than Central Bank. However, Hexa Tradex Limited is 1.09 times less risky than Central Bank. It trades about 0.07 of its potential returns per unit of risk. Central Bank of is currently generating about 0.01 per unit of risk. If you would invest  15,505  in Hexa Tradex Limited on October 24, 2024 and sell it today you would earn a total of  8,295  from holding Hexa Tradex Limited or generate 53.5% return on investment over 90 days.

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

Hexa Tradex Limited  vs.  Central Bank of

Hexa Tradex Limited

Risk-Adjusted Performance

0 of 100

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 conflicting 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.

Central Bank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Central Bank of are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Central Bank is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Hexa Tradex and Central Bank

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

The idea behind Hexa Tradex Limited and Central Bank of 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.