Correlation Between Aptech and Hexaware Technologies

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

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

Diversification Opportunities for Aptech and Hexaware Technologies

0.26

Correlation Coefficient

Aptech  Hexaware Technologies

Modest diversification

The 3 months correlation between Aptech and Hexaware is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aptech Limited and Hexaware Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexaware Technologies and Aptech 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 Aptech Limited are associated (or correlated) with Hexaware Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexaware Technologies has no effect on the direction of Aptech i.e., Aptech and Hexaware Technologies go up and down completely randomly.

Pair Corralation between Aptech and Hexaware Technologies

Assuming the 90 days trading horizon Aptech is expected to generate 2.45 times less return on investment than Hexaware Technologies. In addition to that, Aptech is 1.73 times more volatile than Hexaware Technologies Limited. It trades about 0.05 of its total potential returns per unit of risk. Hexaware Technologies Limited is currently generating about 0.19 per unit of volatility. If you would invest  66,455  in Hexaware Technologies Limited on April 22, 2025 and sell it today you would earn a total of  19,180  from holding Hexaware Technologies Limited or generate 28.86% return on investment over 90 days.

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

Aptech Limited  vs.  Hexaware Technologies Limited

Aptech Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aptech Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Aptech may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Hexaware Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hexaware Technologies Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Hexaware Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptech and Hexaware Technologies

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

The idea behind Aptech Limited and Hexaware Technologies Limited 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.