Correlation Between Hexa Tradex and HDFC Asset

Can any of the company-specific risk be diversified away by investing in both Hexa Tradex and HDFC Asset 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 HDFC Asset 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 HDFC Asset Management, you can compare the effects of market volatilities on Hexa Tradex and HDFC Asset 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 HDFC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexa Tradex and HDFC Asset.

Diversification Opportunities for Hexa Tradex and HDFC Asset

-0.48

Correlation Coefficient

Hexa Tradex  HDFC Asset

Very good diversification

The 3 months correlation between Hexa and HDFC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hexa Tradex Limited and HDFC Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HDFC Asset Management 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 HDFC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HDFC Asset Management has no effect on the direction of Hexa Tradex i.e., Hexa Tradex and HDFC Asset go up and down completely randomly.

Pair Corralation between Hexa Tradex and HDFC Asset

Assuming the 90 days trading horizon Hexa Tradex Limited is expected to under-perform the HDFC Asset. But the stock apears to be less risky and, when comparing its historical volatility, Hexa Tradex Limited is 1.08 times less risky than HDFC Asset. The stock trades about -0.08 of its potential returns per unit of risk. The HDFC Asset Management is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  437,765  in HDFC Asset Management on April 20, 2025 and sell it today you would earn a total of  121,235  from holding HDFC Asset Management or generate 27.69% 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.  HDFC Asset Management

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 unsteady 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.

HDFC Asset Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HDFC Asset Management are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, HDFC Asset exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hexa Tradex and HDFC Asset

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

The idea behind Hexa Tradex Limited and HDFC Asset Management 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.