Correlation Between Mekonomen and Enad Global
Can any of the company-specific risk be diversified away by investing in both Mekonomen and Enad Global 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 Enad Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and Enad Global 7, you can compare the effects of market volatilities on Mekonomen and Enad Global 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 Enad Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and Enad Global.
Diversification Opportunities for Mekonomen and Enad Global
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mekonomen and Enad is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and Enad Global 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enad Global 7 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 Enad Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enad Global 7 has no effect on the direction of Mekonomen i.e., Mekonomen and Enad Global go up and down completely randomly.
Pair Corralation between Mekonomen and Enad Global
Assuming the 90 days trading horizon Mekonomen AB is expected to under-perform the Enad Global. But the stock apears to be less risky and, when comparing its historical volatility, Mekonomen AB is 1.65 times less risky than Enad Global. The stock trades about -0.01 of its potential returns per unit of risk. The Enad Global 7 is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,398 in Enad Global 7 on September 24, 2024 and sell it today you would earn a total of 224.00 from holding Enad Global 7 or generate 16.02% 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. Enad Global 7
Performance |
| Timeline |
| Mekonomen AB |
| Enad Global 7 |
Mekonomen and Enad Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and Enad Global
The main advantage of trading using opposite Mekonomen and Enad Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, Enad Global 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 Enad Global will offset losses from the drop in Enad Global's long position.The idea behind Mekonomen AB and Enad Global 7 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Enad Global vs. Samhllsbyggnadsbolaget i Norden | Enad Global vs. Sinch AB | Enad Global vs. Zaptec AS | Enad Global vs. Evolution 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |