Correlation Between Mekonomen and Cinis Fertilizer
Can any of the company-specific risk be diversified away by investing in both Mekonomen and Cinis Fertilizer 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 Cinis Fertilizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and Cinis Fertilizer AB, you can compare the effects of market volatilities on Mekonomen and Cinis Fertilizer 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 Cinis Fertilizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and Cinis Fertilizer.
Diversification Opportunities for Mekonomen and Cinis Fertilizer
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mekonomen and Cinis is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and Cinis Fertilizer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinis Fertilizer 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 Cinis Fertilizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinis Fertilizer has no effect on the direction of Mekonomen i.e., Mekonomen and Cinis Fertilizer go up and down completely randomly.
Pair Corralation between Mekonomen and Cinis Fertilizer
Assuming the 90 days trading horizon Mekonomen AB is expected to generate 0.31 times more return on investment than Cinis Fertilizer. However, Mekonomen AB is 3.27 times less risky than Cinis Fertilizer. It trades about -0.17 of its potential returns per unit of risk. Cinis Fertilizer AB is currently generating about -0.17 per unit of risk. If you would invest 13,573 in Mekonomen AB on August 24, 2024 and sell it today you would lose (813.00) from holding Mekonomen AB or give up 5.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mekonomen AB vs. Cinis Fertilizer AB
Performance |
| Timeline |
| Mekonomen AB |
| Cinis Fertilizer |
Mekonomen and Cinis Fertilizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and Cinis Fertilizer
The main advantage of trading using opposite Mekonomen and Cinis Fertilizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, Cinis Fertilizer 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 Cinis Fertilizer will offset losses from the drop in Cinis Fertilizer's long position.| Mekonomen vs. New Wave Group | Mekonomen vs. Clas Ohlson AB | Mekonomen vs. BE Group AB | Mekonomen vs. Betsson AB |
| Cinis Fertilizer vs. KABE Group AB | Cinis Fertilizer vs. IAR Systems Group | Cinis Fertilizer vs. Mekonomen AB | Cinis Fertilizer vs. Norva24 Group 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.
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