Correlation Between Hexatronic Group and MAG Interactive

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

Diversification Opportunities for Hexatronic Group and MAG Interactive

0.55

Correlation Coefficient

Hexatronic Group  MAG Interactive

Very weak diversification

The 3 months correlation between Hexatronic and MAG is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hexatronic Group AB and MAG Interactive AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG Interactive 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 MAG Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG Interactive AB has no effect on the direction of Hexatronic Group i.e., Hexatronic Group and MAG Interactive go up and down completely randomly.

Pair Corralation between Hexatronic Group and MAG Interactive

Assuming the 90 days trading horizon Hexatronic Group AB is expected to under-perform the MAG Interactive. In addition to that, Hexatronic Group is 1.11 times more volatile than MAG Interactive AB. It trades about -0.16 of its total potential returns per unit of risk. MAG Interactive AB is currently generating about -0.03 per unit of volatility. If you would invest  900.00  in MAG Interactive AB on September 4, 2024 and sell it today you would lose (72.00) from holding MAG Interactive AB or give up 8.0% of portfolio value over 90 days.

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

Hexatronic Group AB  vs.  MAG Interactive 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

MAG Interactive AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAG Interactive AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, MAG Interactive 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 MAG Interactive

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

The idea behind Hexatronic Group AB and MAG Interactive 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.