Correlation Between Bravida Holding and Mekonomen
Can any of the company-specific risk be diversified away by investing in both Bravida Holding 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 Bravida Holding and Mekonomen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bravida Holding AB and Mekonomen AB, you can compare the effects of market volatilities on Bravida Holding 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 Bravida Holding with a short position of Mekonomen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bravida Holding and Mekonomen.
Diversification Opportunities for Bravida Holding and Mekonomen
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bravida and Mekonomen is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bravida Holding AB and Mekonomen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekonomen AB and Bravida Holding 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 Bravida Holding 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 Bravida Holding i.e., Bravida Holding and Mekonomen go up and down completely randomly.
Pair Corralation between Bravida Holding and Mekonomen
Assuming the 90 days trading horizon Bravida Holding AB is expected to generate 0.66 times more return on investment than Mekonomen. However, Bravida Holding AB is 1.51 times less risky than Mekonomen. It trades about 0.27 of its potential returns per unit of risk. Mekonomen AB is currently generating about -0.01 per unit of risk. If you would invest 8,120 in Bravida Holding AB on December 11, 2024 and sell it today you would earn a total of 1,020 from holding Bravida Holding AB or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bravida Holding AB vs. Mekonomen AB
Performance |
| Timeline |
| Bravida Holding AB |
| Mekonomen AB |
Bravida Holding and Mekonomen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bravida Holding and Mekonomen
The main advantage of trading using opposite Bravida Holding and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bravida Holding 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.| Bravida Holding vs. Nolato AB | Bravida Holding vs. Indutrade AB | Bravida Holding vs. HEXPOL AB | Bravida Holding vs. Addtech AB |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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