Correlation Between Byggmax Group and Mekonomen
Can any of the company-specific risk be diversified away by investing in both Byggmax Group 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 Byggmax Group and Mekonomen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byggmax Group AB and Mekonomen AB, you can compare the effects of market volatilities on Byggmax Group 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 Byggmax Group with a short position of Mekonomen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggmax Group and Mekonomen.
Diversification Opportunities for Byggmax Group and Mekonomen
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Byggmax and Mekonomen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and Mekonomen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekonomen AB and Byggmax 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 Byggmax Group 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 Byggmax Group i.e., Byggmax Group and Mekonomen go up and down completely randomly.
Pair Corralation between Byggmax Group and Mekonomen
Assuming the 90 days trading horizon Byggmax Group AB is expected to under-perform the Mekonomen. In addition to that, Byggmax Group is 1.64 times more volatile than Mekonomen AB. It trades about -0.13 of its total potential returns per unit of risk. Mekonomen AB is currently generating about -0.14 per unit of volatility. If you would invest 13,849 in Mekonomen AB on August 29, 2024 and sell it today you would lose (749.00) from holding Mekonomen AB or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byggmax Group AB vs. Mekonomen AB
Performance |
| Timeline |
| Byggmax Group AB |
| Mekonomen AB |
Byggmax Group and Mekonomen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byggmax Group and Mekonomen
The main advantage of trading using opposite Byggmax Group and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggmax Group 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.| Byggmax Group vs. Clas Ohlson AB | Byggmax Group vs. Inwido AB | Byggmax Group vs. Cloetta AB | Byggmax Group vs. Betsson AB |
| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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