Correlation Between Hexatronic Group and Inwido AB

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

Diversification Opportunities for Hexatronic Group and Inwido AB

-0.07

Correlation Coefficient

Hexatronic Group  Inwido AB

Good diversification

The 3 months correlation between Hexatronic and Inwido is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB 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 Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and Inwido AB go up and down completely randomly.

Pair Corralation between Hexatronic Group and Inwido AB

Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the Inwido AB. In addition to that, Hexatronic Group is 2.23 times more volatile than Inwido AB. It trades about -0.04 of its total potential returns per unit of risk. Inwido AB is currently generating about -0.07 per unit of volatility. If you would invest  19,050  in Inwido AB on October 5, 2024 and sell it today you would lose (370.00) from holding Inwido AB or give up 1.94% of portfolio value over 90 days.

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

Hexatronic Group AB  vs.  Inwido AB

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Inwido AB

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Inwido AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Inwido AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hexatronic Group and Inwido AB

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

The idea behind Hexatronic Group AB and Inwido AB 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.