Correlation Between Brilliant Future and Mekonomen
Can any of the company-specific risk be diversified away by investing in both Brilliant Future 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 Brilliant Future and Mekonomen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brilliant Future AB and Mekonomen AB, you can compare the effects of market volatilities on Brilliant Future 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 Brilliant Future with a short position of Mekonomen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brilliant Future and Mekonomen.
Diversification Opportunities for Brilliant Future and Mekonomen
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brilliant and Mekonomen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Brilliant Future AB and Mekonomen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekonomen AB and Brilliant Future 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 Brilliant Future 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 Brilliant Future i.e., Brilliant Future and Mekonomen go up and down completely randomly.
Pair Corralation between Brilliant Future and Mekonomen
Assuming the 90 days trading horizon Brilliant Future AB is expected to under-perform the Mekonomen. In addition to that, Brilliant Future is 1.26 times more volatile than Mekonomen AB. It trades about -0.02 of its total potential returns per unit of risk. Mekonomen AB is currently generating about 0.03 per unit of volatility. If you would invest 10,728 in Mekonomen AB on August 30, 2024 and sell it today you would earn a total of 2,472 from holding Mekonomen AB or generate 23.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Brilliant Future AB vs. Mekonomen AB
Performance |
| Timeline |
| Brilliant Future |
| Mekonomen AB |
Brilliant Future and Mekonomen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brilliant Future and Mekonomen
The main advantage of trading using opposite Brilliant Future and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brilliant Future 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.| Brilliant Future vs. Ekobot AB | Brilliant Future vs. Ayima Group AB | Brilliant Future vs. JonDeTech Sensors | Brilliant Future vs. Clean Motion AB |
| Mekonomen vs. Sinch AB | Mekonomen vs. Hexatronic Group AB | Mekonomen vs. NIBE Industrier AB | Mekonomen vs. Evolution 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets |