Correlation Between Integrum and Hexagon AB

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

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

Diversification Opportunities for Integrum and Hexagon AB

-0.13

Correlation Coefficient

Integrum  Hexagon AB

Good diversification

The 3 months correlation between Integrum and Hexagon is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Integrum AB Series and Hexagon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexagon AB and Integrum 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 Integrum AB Series are associated (or correlated) with Hexagon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexagon AB has no effect on the direction of Integrum i.e., Integrum and Hexagon AB go up and down completely randomly.

Pair Corralation between Integrum and Hexagon AB

Assuming the 90 days trading horizon Integrum AB Series is expected to under-perform the Hexagon AB. In addition to that, Integrum is 2.38 times more volatile than Hexagon AB. It trades about -0.16 of its total potential returns per unit of risk. Hexagon AB is currently generating about -0.03 per unit of volatility. If you would invest  11,620  in Hexagon AB on October 13, 2024 and sell it today you would lose (980.00) from holding Hexagon AB or give up 8.43% of portfolio value over 90 days.

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

Integrum AB Series  vs.  Hexagon AB

Integrum AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrum AB Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hexagon AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hexagon AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hexagon AB is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Integrum and Hexagon AB

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

The idea behind Integrum AB Series and Hexagon 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.