Correlation Between Mekonomen and Embellence Group
Can any of the company-specific risk be diversified away by investing in both Mekonomen and Embellence Group 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 Embellence Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and Embellence Group AB, you can compare the effects of market volatilities on Mekonomen and Embellence Group 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 Embellence Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and Embellence Group.
Diversification Opportunities for Mekonomen and Embellence Group
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mekonomen and Embellence is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and Embellence Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embellence Group 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 Embellence Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embellence Group has no effect on the direction of Mekonomen i.e., Mekonomen and Embellence Group go up and down completely randomly.
Pair Corralation between Mekonomen and Embellence Group
Assuming the 90 days trading horizon Mekonomen AB is expected to under-perform the Embellence Group. But the stock apears to be less risky and, when comparing its historical volatility, Mekonomen AB is 1.22 times less risky than Embellence Group. The stock trades about -0.06 of its potential returns per unit of risk. The Embellence Group AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,170 in Embellence Group AB on November 2, 2024 and sell it today you would earn a total of 130.00 from holding Embellence Group AB or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Mekonomen AB vs. Embellence Group AB
Performance |
| Timeline |
| Mekonomen AB |
| Embellence Group |
Mekonomen and Embellence Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and Embellence Group
The main advantage of trading using opposite Mekonomen and Embellence Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, Embellence Group 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 Embellence Group will offset losses from the drop in Embellence Group's long position.| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab AB |
| Embellence Group vs. Rugvista Group AB | Embellence Group vs. Nimbus Group AB | Embellence Group vs. Desenio Group AB | Embellence Group vs. Idun Industrier 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |