Correlation Between Hexagon AB and Nanalysis Scientific

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

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

Diversification Opportunities for Hexagon AB and Nanalysis Scientific

0.41

Correlation Coefficient

Hexagon AB  Nanalysis Scientific

Very weak diversification

The 3 months correlation between Hexagon and Nanalysis is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hexagon AB ADR and Nanalysis Scientific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanalysis Scientific Corp and Hexagon AB 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 AB ADR are associated (or correlated) with Nanalysis Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanalysis Scientific Corp has no effect on the direction of Hexagon AB i.e., Hexagon AB and Nanalysis Scientific go up and down completely randomly.

Pair Corralation between Hexagon AB and Nanalysis Scientific

Assuming the 90 days horizon Hexagon AB ADR is expected to generate 0.44 times more return on investment than Nanalysis Scientific. However, Hexagon AB ADR is 2.25 times less risky than Nanalysis Scientific. It trades about 0.01 of its potential returns per unit of risk. Nanalysis Scientific Corp is currently generating about -0.03 per unit of risk. If you would invest  981.00  in Hexagon AB ADR on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Hexagon AB ADR or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Hexagon AB ADR  vs.  Nanalysis Scientific Corp

Hexagon AB ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hexagon AB ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Hexagon AB is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Nanalysis Scientific Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanalysis Scientific Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Hexagon AB and Nanalysis Scientific

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

The idea behind Hexagon AB ADR and Nanalysis Scientific Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.