Correlation Between Hexatronic Group and Implantica

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

By analyzing existing cross correlation between Hexatronic Group AB and Implantica AG, you can compare the effects of market volatilities on Hexatronic Group and Implantica 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 Hexatronic Group with a short position of Implantica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexatronic Group and Implantica.

Diversification Opportunities for Hexatronic Group and Implantica

0.83

Correlation Coefficient

Hexatronic Group  Implantica

Very poor diversification

The 3 months correlation between Hexatronic and Implantica is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and Implantica AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implantica AG and Hexatronic 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 Hexatronic Group AB are associated (or correlated) with Implantica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implantica AG has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and Implantica go up and down completely randomly.

Pair Corralation between Hexatronic Group and Implantica

Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the Implantica. In addition to that, Hexatronic Group is 1.16 times more volatile than Implantica AG. It trades about -0.06 of its total potential returns per unit of risk. Implantica AG is currently generating about 0.06 per unit of volatility. If you would invest  3,000  in Implantica AG on September 24, 2024 and sell it today you would earn a total of  645.00  from holding Implantica AG or generate 21.5% return on investment over 90 days.

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

Hexatronic Group AB  vs.  Implantica AG

Hexatronic Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hexatronic Group AB 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Implantica AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Implantica AG 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hexatronic Group and Implantica

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

The idea behind Hexatronic Group AB and Implantica AG 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.