Correlation Between Hexa Tradex and General Insurance

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

Diversification Opportunities for Hexa Tradex and General Insurance

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Hexa and General is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hexa Tradex Limited and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance and Hexa Tradex 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 Hexa Tradex Limited are associated (or correlated) with General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of Hexa Tradex i.e., Hexa Tradex and General Insurance go up and down completely randomly.

Pair Corralation between Hexa Tradex and General Insurance

Assuming the 90 days trading horizon Hexa Tradex Limited is expected to under-perform the General Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Hexa Tradex Limited is 1.07 times less risky than General Insurance. The stock trades about -0.08 of its potential returns per unit of risk. The General Insurance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  37,262  in General Insurance on August 21, 2025 and sell it today you would earn a total of  2,083  from holding General Insurance or generate 5.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hexa Tradex Limited  vs.  General Insurance

 Performance 
       Timeline  
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 current stock price disturbance, may contribute to short-term losses for the investors.
General Insurance 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in General Insurance are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, General Insurance is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Hexa Tradex and General Insurance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hexa Tradex and General Insurance

The main advantage of trading using opposite Hexa Tradex and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexa Tradex position performs unexpectedly, General Insurance 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 General Insurance will offset losses from the drop in General Insurance's long position.
The idea behind Hexa Tradex Limited and General Insurance 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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