Correlation Between HEXPOL AB and Waystream Holding

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

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

Diversification Opportunities for HEXPOL AB and Waystream Holding

0.53

Correlation Coefficient

HEXPOL AB  Waystream Holding

Very weak diversification

The 3 months correlation between HEXPOL and Waystream is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding HEXPOL AB and Waystream Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waystream Holding and HEXPOL 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 HEXPOL AB are associated (or correlated) with Waystream Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waystream Holding has no effect on the direction of HEXPOL AB i.e., HEXPOL AB and Waystream Holding go up and down completely randomly.

Pair Corralation between HEXPOL AB and Waystream Holding

Assuming the 90 days trading horizon HEXPOL AB is expected to generate 5.43 times less return on investment than Waystream Holding. But when comparing it to its historical volatility, HEXPOL AB is 2.07 times less risky than Waystream Holding. It trades about 0.08 of its potential returns per unit of risk. Waystream Holding AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,750  in Waystream Holding AB on April 25, 2025 and sell it today you would earn a total of  1,280  from holding Waystream Holding AB or generate 46.55% return on investment over 90 days.

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

HEXPOL AB  vs.  Waystream Holding AB

HEXPOL AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HEXPOL AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HEXPOL AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Waystream Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Waystream Holding AB are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Waystream Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEXPOL AB and Waystream Holding

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

The idea behind HEXPOL AB and Waystream Holding 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.