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
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mekonomen and Enad is 0.03. 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 generate 0.55 times more return on investment than Enad Global. However, Mekonomen AB is 1.83 times less risky than Enad Global. It trades about 0.02 of its potential returns per unit of risk. Enad Global 7 is currently generating about -0.03 per unit of risk. If you would invest 11,312 in Mekonomen AB on October 30, 2024 and sell it today you would earn a total of 1,508 from holding Mekonomen AB or generate 13.33% 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.| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab AB |
| Enad Global vs. Stillfront Group AB | Enad Global vs. Embracer Group AB | Enad Global vs. G5 Entertainment publ | Enad Global vs. Sinch 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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