Correlation Between Mekonomen and EEducation Albert
Can any of the company-specific risk be diversified away by investing in both Mekonomen and EEducation Albert 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 Mekonomen and EEducation Albert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and eEducation Albert AB, you can compare the effects of market volatilities on Mekonomen and EEducation Albert 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 Mekonomen with a short position of EEducation Albert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and EEducation Albert.
Diversification Opportunities for Mekonomen and EEducation Albert
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mekonomen and EEducation is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and eEducation Albert AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eEducation Albert and Mekonomen 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 Mekonomen AB are associated (or correlated) with EEducation Albert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eEducation Albert has no effect on the direction of Mekonomen i.e., Mekonomen and EEducation Albert go up and down completely randomly.
Pair Corralation between Mekonomen and EEducation Albert
Assuming the 90 days trading horizon Mekonomen AB is expected to generate 0.47 times more return on investment than EEducation Albert. However, Mekonomen AB is 2.14 times less risky than EEducation Albert. It trades about 0.03 of its potential returns per unit of risk. eEducation Albert AB is currently generating about -0.06 per unit of risk. If you would invest 10,982 in Mekonomen AB on August 24, 2024 and sell it today you would earn a total of 1,778 from holding Mekonomen AB or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mekonomen AB vs. eEducation Albert AB
Performance |
| Timeline |
| Mekonomen AB |
| eEducation Albert |
Mekonomen and EEducation Albert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and EEducation Albert
The main advantage of trading using opposite Mekonomen and EEducation Albert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, EEducation Albert 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 EEducation Albert will offset losses from the drop in EEducation Albert's long position.| Mekonomen vs. New Wave Group | Mekonomen vs. Clas Ohlson AB | Mekonomen vs. BE Group AB | Mekonomen vs. Betsson AB |
| EEducation Albert vs. Greater Than AB | EEducation Albert vs. Cint Group AB | EEducation Albert vs. Acconeer AB | EEducation Albert vs. IAR Systems Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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