Correlation Between Hexcel and Satellogic

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

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

Diversification Opportunities for Hexcel and Satellogic

-0.57

Correlation Coefficient

Hexcel  Satellogic

Excellent diversification

The 3 months correlation between Hexcel and Satellogic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hexcel and Satellogic V in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satellogic V and Hexcel 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 Hexcel are associated (or correlated) with Satellogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satellogic V has no effect on the direction of Hexcel i.e., Hexcel and Satellogic go up and down completely randomly.

Pair Corralation between Hexcel and Satellogic

Considering the 90-day investment horizon Hexcel is expected to generate 0.33 times more return on investment than Satellogic. However, Hexcel is 3.01 times less risky than Satellogic. It trades about 0.22 of its potential returns per unit of risk. Satellogic V is currently generating about -0.02 per unit of risk. If you would invest  4,963  in Hexcel on April 29, 2025 and sell it today you would earn a total of  1,222  from holding Hexcel or generate 24.62% return on investment over 90 days.

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

Hexcel  vs.  Satellogic V

Hexcel

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hexcel are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Hexcel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Satellogic V

Risk-Adjusted Performance

Very Weak

Over the last 90 days Satellogic V has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Satellogic is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Hexcel and Satellogic

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

The idea behind Hexcel and Satellogic V 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.