Correlation Between Mekonomen and Havsfrun Investment
Can any of the company-specific risk be diversified away by investing in both Mekonomen and Havsfrun Investment 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 Havsfrun Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and Havsfrun Investment AB, you can compare the effects of market volatilities on Mekonomen and Havsfrun Investment 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 Havsfrun Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and Havsfrun Investment.
Diversification Opportunities for Mekonomen and Havsfrun Investment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mekonomen and Havsfrun is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and Havsfrun Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havsfrun Investment 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 Havsfrun Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havsfrun Investment has no effect on the direction of Mekonomen i.e., Mekonomen and Havsfrun Investment go up and down completely randomly.
Pair Corralation between Mekonomen and Havsfrun Investment
Assuming the 90 days trading horizon Mekonomen AB is expected to generate 0.59 times more return on investment than Havsfrun Investment. However, Mekonomen AB is 1.69 times less risky than Havsfrun Investment. It trades about 0.03 of its potential returns per unit of risk. Havsfrun Investment AB is currently generating about 0.02 per unit of risk. If you would invest 10,653 in Mekonomen AB on September 26, 2024 and sell it today you would earn a total of 2,407 from holding Mekonomen AB or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mekonomen AB vs. Havsfrun Investment AB
Performance |
| Timeline |
| Mekonomen AB |
| Havsfrun Investment |
Mekonomen and Havsfrun Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and Havsfrun Investment
The main advantage of trading using opposite Mekonomen and Havsfrun Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, Havsfrun Investment 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 Havsfrun Investment will offset losses from the drop in Havsfrun Investment's long position.| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab AB |
| Havsfrun Investment vs. NAXS Nordic Access | Havsfrun Investment vs. FormPipe Software AB | Havsfrun Investment vs. Novotek AB | Havsfrun Investment vs. Mekonomen 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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