Correlation Between Mekonomen and Fastighets
Can any of the company-specific risk be diversified away by investing in both Mekonomen and Fastighets 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 Fastighets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and Fastighets AB Balder, you can compare the effects of market volatilities on Mekonomen and Fastighets 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 Fastighets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and Fastighets.
Diversification Opportunities for Mekonomen and Fastighets
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mekonomen and Fastighets is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and Fastighets AB Balder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastighets AB Balder 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 Fastighets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastighets AB Balder has no effect on the direction of Mekonomen i.e., Mekonomen and Fastighets go up and down completely randomly.
Pair Corralation between Mekonomen and Fastighets
Assuming the 90 days trading horizon Mekonomen AB is expected to generate 0.81 times more return on investment than Fastighets. However, Mekonomen AB is 1.24 times less risky than Fastighets. It trades about 0.1 of its potential returns per unit of risk. Fastighets AB Balder is currently generating about -0.14 per unit of risk. If you would invest 13,257 in Mekonomen AB on September 14, 2024 and sell it today you would earn a total of 403.00 from holding Mekonomen AB or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mekonomen AB vs. Fastighets AB Balder
Performance |
| Timeline |
| Mekonomen AB |
| Fastighets AB Balder |
Mekonomen and Fastighets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and Fastighets
The main advantage of trading using opposite Mekonomen and Fastighets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, Fastighets 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 Fastighets will offset losses from the drop in Fastighets' long position.| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab AB |
| Fastighets vs. Castellum AB | Fastighets vs. Fabege AB | Fastighets vs. AB Sagax | Fastighets vs. Wallenstam 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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