Correlation Between Hexa Tradex and ESILVER

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

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

Diversification Opportunities for Hexa Tradex and ESILVER

-0.51

Correlation Coefficient

Hexa Tradex  ESILVER

Excellent diversification

The 3 months correlation between Hexa and ESILVER is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hexa Tradex Limited and ESILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESILVER and Hexa Tradex 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 Hexa Tradex Limited are associated (or correlated) with ESILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESILVER has no effect on the direction of Hexa Tradex i.e., Hexa Tradex and ESILVER go up and down completely randomly.

Pair Corralation between Hexa Tradex and ESILVER

Assuming the 90 days trading horizon Hexa Tradex Limited is expected to under-perform the ESILVER. In addition to that, Hexa Tradex is 1.27 times more volatile than ESILVER. It trades about -0.03 of its total potential returns per unit of risk. ESILVER is currently generating about 0.13 per unit of volatility. If you would invest  9,875  in ESILVER on April 23, 2025 and sell it today you would earn a total of  1,549  from holding ESILVER or generate 15.69% return on investment over 90 days.

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

Hexa Tradex Limited  vs.  ESILVER

Hexa Tradex Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hexa Tradex Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ESILVER

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ESILVER are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, ESILVER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hexa Tradex and ESILVER

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

The idea behind Hexa Tradex Limited and ESILVER 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.