Correlation Between Hexatronic Group and K Fast

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

Diversification Opportunities for Hexatronic Group and K Fast

-0.1

Correlation Coefficient

Hexatronic Group  K Fast

Good diversification

The 3 months correlation between Hexatronic and KFAST-B is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and K Fast Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Fast Holding 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 K Fast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Fast Holding has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and K Fast go up and down completely randomly.

Pair Corralation between Hexatronic Group and K Fast

Assuming the 90 days trading horizon Hexatronic Group AB is expected to generate 1.43 times more return on investment than K Fast. However, Hexatronic Group is 1.43 times more volatile than K Fast Holding AB. It trades about -0.08 of its potential returns per unit of risk. K Fast Holding AB is currently generating about -0.17 per unit of risk. If you would invest  3,774  in Hexatronic Group AB on December 1, 2024 and sell it today you would lose (677.00) from holding Hexatronic Group AB or give up 17.94% 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.  K Fast Holding AB

Hexatronic Group

Risk-Adjusted Performance

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

K Fast Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days K Fast Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic 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.

Pair Trading with Hexatronic Group and K Fast

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

The idea behind Hexatronic Group AB and K Fast Holding 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .