Correlation Between Humble Group and Mekonomen
Can any of the company-specific risk be diversified away by investing in both Humble 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 Humble Group and Mekonomen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humble Group AB and Mekonomen AB, you can compare the effects of market volatilities on Humble 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 Humble Group with a short position of Mekonomen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humble Group and Mekonomen.
Diversification Opportunities for Humble Group and Mekonomen
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Humble and Mekonomen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Humble 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 Humble 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 Humble 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 Humble Group i.e., Humble Group and Mekonomen go up and down completely randomly.
Pair Corralation between Humble Group and Mekonomen
Assuming the 90 days trading horizon Humble Group AB is expected to generate 1.57 times more return on investment than Mekonomen. However, Humble Group is 1.57 times more volatile than Mekonomen AB. It trades about 0.03 of its potential returns per unit of risk. Mekonomen AB is currently generating about 0.03 per unit of risk. If you would invest 980.00 in Humble Group AB on September 24, 2024 and sell it today you would earn a total of 237.00 from holding Humble Group AB or generate 24.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humble Group AB vs. Mekonomen AB
Performance |
| Timeline |
| Humble Group AB |
| Mekonomen AB |
Humble Group and Mekonomen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humble Group and Mekonomen
The main advantage of trading using opposite Humble Group and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humble 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.| Humble Group vs. Samhllsbyggnadsbolaget i Norden | Humble Group vs. Media and Games | Humble Group vs. Hexatronic Group AB | Humble Group vs. Sinch 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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