Correlation Between HEXINDO ADIPERKASA and INTERSHOP Communications

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

By analyzing existing cross correlation between HEXINDO ADIPERKASA and INTERSHOP Communications Aktiengesellschaft, you can compare the effects of market volatilities on HEXINDO ADIPERKASA and INTERSHOP Communications 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 HEXINDO ADIPERKASA with a short position of INTERSHOP Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEXINDO ADIPERKASA and INTERSHOP Communications.

Diversification Opportunities for HEXINDO ADIPERKASA and INTERSHOP Communications

-0.27

Correlation Coefficient

HEXINDO ADIPERKASA  INTERSHOP Communications

Very good diversification

The 3 months correlation between HEXINDO and INTERSHOP is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding HEXINDO ADIPERKASA and INTERSHOP Communications Aktie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERSHOP Communications and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA are associated (or correlated) with INTERSHOP Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERSHOP Communications has no effect on the direction of HEXINDO ADIPERKASA i.e., HEXINDO ADIPERKASA and INTERSHOP Communications go up and down completely randomly.

Pair Corralation between HEXINDO ADIPERKASA and INTERSHOP Communications

Assuming the 90 days trading horizon HEXINDO ADIPERKASA is expected to under-perform the INTERSHOP Communications. But the stock apears to be less risky and, when comparing its historical volatility, HEXINDO ADIPERKASA is 1.99 times less risky than INTERSHOP Communications. The stock trades about -0.33 of its potential returns per unit of risk. The INTERSHOP Communications Aktiengesellschaft is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  198.00  in INTERSHOP Communications Aktiengesellschaft on October 6, 2024 and sell it today you would lose (24.00) from holding INTERSHOP Communications Aktiengesellschaft or give up 12.12% of portfolio value over 90 days.

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

HEXINDO ADIPERKASA  vs.  INTERSHOP Communications Aktie

HEXINDO ADIPERKASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEXINDO ADIPERKASA 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.

INTERSHOP Communications

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in INTERSHOP Communications Aktiengesellschaft are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, INTERSHOP Communications is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HEXINDO ADIPERKASA and INTERSHOP Communications

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

The idea behind HEXINDO ADIPERKASA and INTERSHOP Communications Aktiengesellschaft 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.