Correlation Between KABE Group and Mekonomen
Can any of the company-specific risk be diversified away by investing in both KABE 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 KABE Group and Mekonomen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KABE Group AB and Mekonomen AB, you can compare the effects of market volatilities on KABE 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 KABE Group with a short position of Mekonomen. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Mekonomen.
Diversification Opportunities for KABE Group and Mekonomen
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KABE and Mekonomen is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding KABE 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 KABE 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 KABE 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 KABE Group i.e., KABE Group and Mekonomen go up and down completely randomly.
Pair Corralation between KABE Group and Mekonomen
Assuming the 90 days trading horizon KABE Group AB is expected to under-perform the Mekonomen. In addition to that, KABE Group is 1.31 times more volatile than Mekonomen AB. It trades about -0.01 of its total potential returns per unit of risk. Mekonomen AB is currently generating about 0.02 per unit of volatility. If you would invest 13,080 in Mekonomen AB on November 7, 2024 and sell it today you would earn a total of 40.00 from holding Mekonomen AB or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Mekonomen AB
Performance |
| Timeline |
| KABE Group AB |
| Mekonomen AB |
KABE Group and Mekonomen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Mekonomen
The main advantage of trading using opposite KABE Group and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE 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.| KABE Group vs. Byggmax Group AB | KABE Group vs. Svedbergs i Dalstorp | KABE Group vs. Inwido AB | KABE Group vs. New Wave Group |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |