Correlation Between Hexagon Purus and Hexagon Composites

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

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

Diversification Opportunities for Hexagon Purus and Hexagon Composites

-0.38

Correlation Coefficient

Hexagon Purus  Hexagon Composites

Very good diversification

The 3 months correlation between Hexagon and Hexagon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hexagon Purus As and Hexagon Composites ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexagon Composites ASA and Hexagon Purus 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 Hexagon Purus As are associated (or correlated) with Hexagon Composites. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexagon Composites ASA has no effect on the direction of Hexagon Purus i.e., Hexagon Purus and Hexagon Composites go up and down completely randomly.

Pair Corralation between Hexagon Purus and Hexagon Composites

Assuming the 90 days trading horizon Hexagon Purus As is expected to under-perform the Hexagon Composites. In addition to that, Hexagon Purus is 1.57 times more volatile than Hexagon Composites ASA. It trades about -0.14 of its total potential returns per unit of risk. Hexagon Composites ASA is currently generating about 0.1 per unit of volatility. If you would invest  3,950  in Hexagon Composites ASA on September 12, 2024 and sell it today you would earn a total of  755.00  from holding Hexagon Composites ASA or generate 19.11% return on investment over 90 days.

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

Hexagon Purus As  vs.  Hexagon Composites ASA

Hexagon Purus As

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hexagon Purus As has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Hexagon Composites ASA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hexagon Composites ASA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Hexagon Composites disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hexagon Purus and Hexagon Composites

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

The idea behind Hexagon Purus As and Hexagon Composites ASA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.