Correlation Between Adani Power and Hexa Tradex

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Can any of the company-specific risk be diversified away by investing in both Adani Power and Hexa Tradex 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 Adani Power and Hexa Tradex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adani Power Limited and Hexa Tradex Limited, you can compare the effects of market volatilities on Adani Power and Hexa Tradex 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 Adani Power with a short position of Hexa Tradex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adani Power and Hexa Tradex.

Diversification Opportunities for Adani Power and Hexa Tradex

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Adani and Hexa is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Adani Power Limited and Hexa Tradex Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexa Tradex Limited and Adani Power 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 Adani Power Limited are associated (or correlated) with Hexa Tradex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexa Tradex Limited has no effect on the direction of Adani Power i.e., Adani Power and Hexa Tradex go up and down completely randomly.

Pair Corralation between Adani Power and Hexa Tradex

Assuming the 90 days trading horizon Adani Power Limited is expected to generate 3.77 times more return on investment than Hexa Tradex. However, Adani Power is 3.77 times more volatile than Hexa Tradex Limited. It trades about 0.1 of its potential returns per unit of risk. Hexa Tradex Limited is currently generating about -0.09 per unit of risk. If you would invest  12,013  in Adani Power Limited on August 29, 2025 and sell it today you would earn a total of  2,800  from holding Adani Power Limited or generate 23.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Adani Power Limited  vs.  Hexa Tradex Limited

 Performance 
       Timeline  
Adani Power Limited 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Adani Power Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Adani Power displayed solid returns over the last few months and may actually be approaching a breakup point.
Hexa Tradex Limited 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Hexa Tradex Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Hexa Tradex is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Adani Power and Hexa Tradex Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Adani Power and Hexa Tradex

The main advantage of trading using opposite Adani Power and Hexa Tradex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adani Power position performs unexpectedly, Hexa Tradex 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 Hexa Tradex will offset losses from the drop in Hexa Tradex's long position.
The idea behind Adani Power Limited and Hexa Tradex Limited 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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