Correlation Between SinterCast and HEXPOL AB

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

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

Diversification Opportunities for SinterCast and HEXPOL AB

0.79

Correlation Coefficient

SinterCast  HEXPOL AB

Poor diversification

The 3 months correlation between SinterCast and HEXPOL is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SinterCast AB and HEXPOL AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXPOL AB and SinterCast 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 SinterCast AB are associated (or correlated) with HEXPOL AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXPOL AB has no effect on the direction of SinterCast i.e., SinterCast and HEXPOL AB go up and down completely randomly.

Pair Corralation between SinterCast and HEXPOL AB

Assuming the 90 days trading horizon SinterCast AB is expected to generate 0.88 times more return on investment than HEXPOL AB. However, SinterCast AB is 1.14 times less risky than HEXPOL AB. It trades about 0.19 of its potential returns per unit of risk. HEXPOL AB is currently generating about 0.12 per unit of risk. If you would invest  10,037  in SinterCast AB on April 22, 2025 and sell it today you would earn a total of  1,763  from holding SinterCast AB or generate 17.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

SinterCast AB  vs.  HEXPOL AB

SinterCast AB

Risk-Adjusted Performance

Good

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

HEXPOL AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HEXPOL AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, HEXPOL AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SinterCast and HEXPOL AB

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

The idea behind SinterCast AB and HEXPOL 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.