Correlation Between Mekonomen and FastPartner
Can any of the company-specific risk be diversified away by investing in both Mekonomen and FastPartner 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 FastPartner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and FastPartner AB, you can compare the effects of market volatilities on Mekonomen and FastPartner 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 FastPartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and FastPartner.
Diversification Opportunities for Mekonomen and FastPartner
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mekonomen and FastPartner is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and FastPartner AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FastPartner 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 FastPartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FastPartner AB has no effect on the direction of Mekonomen i.e., Mekonomen and FastPartner go up and down completely randomly.
Pair Corralation between Mekonomen and FastPartner
Assuming the 90 days trading horizon Mekonomen AB is expected to generate 0.69 times more return on investment than FastPartner. However, Mekonomen AB is 1.45 times less risky than FastPartner. It trades about 0.03 of its potential returns per unit of risk. FastPartner AB is currently generating about 0.0 per unit of risk. If you would invest 11,406 in Mekonomen AB on September 1, 2024 and sell it today you would earn a total of 1,914 from holding Mekonomen AB or generate 16.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mekonomen AB vs. FastPartner AB
Performance |
| Timeline |
| Mekonomen AB |
| FastPartner AB |
Mekonomen and FastPartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and FastPartner
The main advantage of trading using opposite Mekonomen and FastPartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, FastPartner 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 FastPartner will offset losses from the drop in FastPartner's long position.| Mekonomen vs. NetJobs Group AB | Mekonomen vs. Mantex AB | Mekonomen vs. Doxa AB | Mekonomen vs. Clean Motion AB |
| FastPartner vs. Samhaellsbyggnadsbolaget i Norden | FastPartner vs. AB Sagax | FastPartner vs. Atrium Ljungberg AB | FastPartner vs. Nyfosa 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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