Correlation Between Mekonomen and Bravida Holding
Can any of the company-specific risk be diversified away by investing in both Mekonomen and Bravida Holding 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 Bravida Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and Bravida Holding AB, you can compare the effects of market volatilities on Mekonomen and Bravida Holding 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 Bravida Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and Bravida Holding.
Diversification Opportunities for Mekonomen and Bravida Holding
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mekonomen and Bravida is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and Bravida Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravida Holding AB 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 Bravida Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bravida Holding AB has no effect on the direction of Mekonomen i.e., Mekonomen and Bravida Holding go up and down completely randomly.
Pair Corralation between Mekonomen and Bravida Holding
Assuming the 90 days trading horizon Mekonomen AB is expected to under-perform the Bravida Holding. In addition to that, Mekonomen is 1.51 times more volatile than Bravida Holding AB. It trades about -0.01 of its total potential returns per unit of risk. Bravida Holding AB is currently generating about 0.27 per unit of volatility. If you would invest 8,120 in Bravida Holding AB on December 11, 2024 and sell it today you would earn a total of 1,020 from holding Bravida Holding AB or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mekonomen AB vs. Bravida Holding AB
Performance |
| Timeline |
| Mekonomen AB |
| Bravida Holding AB |
Mekonomen and Bravida Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and Bravida Holding
The main advantage of trading using opposite Mekonomen and Bravida Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, Bravida Holding 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 Bravida Holding will offset losses from the drop in Bravida Holding's long position.| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab AB |
| Bravida Holding vs. Nolato AB | Bravida Holding vs. Indutrade AB | Bravida Holding vs. HEXPOL AB | Bravida Holding vs. Addtech 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |