Correlation Between Hexagon Composites and Powercell Sweden

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

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

Diversification Opportunities for Hexagon Composites and Powercell Sweden

-0.05

Correlation Coefficient

Hexagon Composites  Powercell Sweden

Good diversification

The 3 months correlation between Hexagon and Powercell is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hexagon Composites ASA and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden and Hexagon Composites 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 Hexagon Composites ASA are associated (or correlated) with Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of Hexagon Composites i.e., Hexagon Composites and Powercell Sweden go up and down completely randomly.

Pair Corralation between Hexagon Composites and Powercell Sweden

Assuming the 90 days trading horizon Hexagon Composites is expected to generate 4.12 times less return on investment than Powercell Sweden. But when comparing it to its historical volatility, Hexagon Composites ASA is 1.18 times less risky than Powercell Sweden. It trades about 0.02 of its potential returns per unit of risk. Powercell Sweden is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,512  in Powercell Sweden on May 18, 2025 and sell it today you would earn a total of  236.00  from holding Powercell Sweden or generate 9.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Hexagon Composites ASA  vs.  Powercell Sweden

Hexagon Composites ASA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hexagon Composites ASA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Hexagon Composites is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Powercell Sweden

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Powercell Sweden are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Powercell Sweden unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hexagon Composites and Powercell Sweden

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

The idea behind Hexagon Composites ASA and Powercell Sweden 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.