Correlation Between SCHMID Group and Hexcel

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

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

Diversification Opportunities for SCHMID Group and Hexcel

-0.49

Correlation Coefficient

SCHMID Group  Hexcel

Very good diversification

The 3 months correlation between SCHMID and Hexcel is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SCHMID Group NV and Hexcel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexcel and SCHMID Group 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 SCHMID Group NV are associated (or correlated) with Hexcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexcel has no effect on the direction of SCHMID Group i.e., SCHMID Group and Hexcel go up and down completely randomly.

Pair Corralation between SCHMID Group and Hexcel

Assuming the 90 days horizon SCHMID Group NV is expected to under-perform the Hexcel. In addition to that, SCHMID Group is 6.09 times more volatile than Hexcel. It trades about -0.03 of its total potential returns per unit of risk. Hexcel is currently generating about 0.2 per unit of volatility. If you would invest  4,965  in Hexcel on May 2, 2025 and sell it today you would earn a total of  1,026  from holding Hexcel or generate 20.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	66.13%
Values	Daily Returns

SCHMID Group NV  vs.  Hexcel

SCHMID Group NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days SCHMID Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Hexcel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hexcel are ranked lower than 15 (%) 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.

Pair Trading with SCHMID Group and Hexcel

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

The idea behind SCHMID Group NV and Hexcel 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.