Correlation Between Avensia Publ and Mekonomen
Can any of the company-specific risk be diversified away by investing in both Avensia Publ and Mekonomen 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 Avensia Publ and Mekonomen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avensia publ AB and Mekonomen AB, you can compare the effects of market volatilities on Avensia Publ and Mekonomen 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 Avensia Publ with a short position of Mekonomen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avensia Publ and Mekonomen.
Diversification Opportunities for Avensia Publ and Mekonomen
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Avensia and Mekonomen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Avensia publ AB and Mekonomen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekonomen AB and Avensia Publ 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 Avensia publ AB are associated (or correlated) with Mekonomen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mekonomen AB has no effect on the direction of Avensia Publ i.e., Avensia Publ and Mekonomen go up and down completely randomly.
Pair Corralation between Avensia Publ and Mekonomen
Assuming the 90 days trading horizon Avensia publ AB is expected to generate 1.19 times more return on investment than Mekonomen. However, Avensia Publ is 1.19 times more volatile than Mekonomen AB. It trades about 0.17 of its potential returns per unit of risk. Mekonomen AB is currently generating about -0.12 per unit of risk. If you would invest 770.00 in Avensia publ AB on September 5, 2024 and sell it today you would earn a total of 58.00 from holding Avensia publ AB or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avensia publ AB vs. Mekonomen AB
Performance |
| Timeline |
| Avensia publ AB |
| Mekonomen AB |
Avensia Publ and Mekonomen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avensia Publ and Mekonomen
The main advantage of trading using opposite Avensia Publ and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avensia Publ position performs unexpectedly, Mekonomen 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 Mekonomen will offset losses from the drop in Mekonomen's long position.| Avensia Publ vs. FormPipe Software AB | Avensia Publ vs. Micro Systemation AB | Avensia Publ vs. CTT Systems AB | Avensia Publ vs. CAG Group AB |
| Mekonomen vs. New Wave Group | Mekonomen vs. Clas Ohlson AB | Mekonomen vs. BE Group AB | Mekonomen vs. Betsson AB |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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