Correlation Between Goodbye Kansas and Mekonomen
Can any of the company-specific risk be diversified away by investing in both Goodbye Kansas 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 Goodbye Kansas and Mekonomen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodbye Kansas Group and Mekonomen AB, you can compare the effects of market volatilities on Goodbye Kansas 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 Goodbye Kansas with a short position of Mekonomen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodbye Kansas and Mekonomen.
Diversification Opportunities for Goodbye Kansas and Mekonomen
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goodbye and Mekonomen is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Goodbye Kansas Group and Mekonomen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekonomen AB and Goodbye Kansas 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 Goodbye Kansas Group 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 Goodbye Kansas i.e., Goodbye Kansas and Mekonomen go up and down completely randomly.
Pair Corralation between Goodbye Kansas and Mekonomen
Assuming the 90 days trading horizon Goodbye Kansas Group is expected to generate 3.28 times more return on investment than Mekonomen. However, Goodbye Kansas is 3.28 times more volatile than Mekonomen AB. It trades about 0.48 of its potential returns per unit of risk. Mekonomen AB is currently generating about -0.17 per unit of risk. If you would invest 145.00 in Goodbye Kansas Group on October 30, 2024 and sell it today you would earn a total of 67.00 from holding Goodbye Kansas Group or generate 46.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Goodbye Kansas Group vs. Mekonomen AB
Performance |
| Timeline |
| Goodbye Kansas Group |
| Mekonomen AB |
Goodbye Kansas and Mekonomen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodbye Kansas and Mekonomen
The main advantage of trading using opposite Goodbye Kansas and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodbye Kansas 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.| Goodbye Kansas vs. Vitec Software Group | Goodbye Kansas vs. G5 Entertainment publ | Goodbye Kansas vs. Kinnevik Investment AB | Goodbye Kansas vs. USWE Sports 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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