Correlation Between Beijer Ref and Hexatronic Group

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

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

Diversification Opportunities for Beijer Ref and Hexatronic Group

0.5

Correlation Coefficient

Beijer Ref  Hexatronic Group

Very weak diversification

The 3 months correlation between Beijer and Hexatronic is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Beijer Ref AB and Hexatronic Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexatronic Group and Beijer Ref 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 Beijer Ref AB are associated (or correlated) with Hexatronic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexatronic Group has no effect on the direction of Beijer Ref i.e., Beijer Ref and Hexatronic Group go up and down completely randomly.

Pair Corralation between Beijer Ref and Hexatronic Group

Assuming the 90 days trading horizon Beijer Ref AB is expected to generate 0.7 times more return on investment than Hexatronic Group. However, Beijer Ref AB is 1.44 times less risky than Hexatronic Group. It trades about -0.02 of its potential returns per unit of risk. Hexatronic Group AB is currently generating about -0.05 per unit of risk. If you would invest  15,228  in Beijer Ref AB on March 23, 2025 and sell it today you would lose (543.00) from holding Beijer Ref AB or give up 3.57% of portfolio value over 90 days.

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

Beijer Ref AB  vs.  Hexatronic Group AB

Beijer Ref AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beijer Ref AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Beijer Ref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hexatronic Group

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Beijer Ref and Hexatronic Group

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

The idea behind Beijer Ref AB and Hexatronic Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.