Correlation Between ZTE Corp and Hexagon AB
Can any of the company-specific risk be diversified away by investing in both ZTE Corp and Hexagon AB 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 ZTE Corp and Hexagon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZTE Corp H and Hexagon AB, you can compare the effects of market volatilities on ZTE Corp and Hexagon AB 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 ZTE Corp with a short position of Hexagon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTE Corp and Hexagon AB.
Diversification Opportunities for ZTE Corp and Hexagon AB
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZTE and Hexagon is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ZTE Corp H and Hexagon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexagon AB and ZTE Corp 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 ZTE Corp H are associated (or correlated) with Hexagon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexagon AB has no effect on the direction of ZTE Corp i.e., ZTE Corp and Hexagon AB go up and down completely randomly.
Pair Corralation between ZTE Corp and Hexagon AB
Assuming the 90 days horizon ZTE Corp H is expected to generate 3.62 times more return on investment than Hexagon AB. However, ZTE Corp is 3.62 times more volatile than Hexagon AB. It trades about 0.12 of its potential returns per unit of risk. Hexagon AB is currently generating about 0.06 per unit of risk. If you would invest 268.00 in ZTE Corp H on August 13, 2025 and sell it today you would earn a total of 147.00 from holding ZTE Corp H or generate 54.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZTE Corp H vs. Hexagon AB
Performance |
| Timeline |
| ZTE Corp H |
| Hexagon AB |
ZTE Corp and Hexagon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZTE Corp and Hexagon AB
The main advantage of trading using opposite ZTE Corp and Hexagon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTE Corp position performs unexpectedly, Hexagon AB 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 Hexagon AB will offset losses from the drop in Hexagon AB's long position.| ZTE Corp vs. Telefonaktiebolaget LM Ericsson | ZTE Corp vs. Canon Inc | ZTE Corp vs. Capgemini SE ADR | ZTE Corp vs. Capgemini SE |
| Hexagon AB vs. TDK Corporation | Hexagon AB vs. TDK Corp ADR | Hexagon AB vs. Telefonaktiebolaget LM Ericsson | Hexagon AB vs. ASM International NV |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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