Correlation Between Mekonomen and Humble Group
Can any of the company-specific risk be diversified away by investing in both Mekonomen and Humble 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 Humble 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 Humble Group AB, you can compare the effects of market volatilities on Mekonomen and Humble 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 Humble Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and Humble Group.
Diversification Opportunities for Mekonomen and Humble Group
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mekonomen and Humble is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and Humble Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humble Group 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 Humble Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humble Group AB has no effect on the direction of Mekonomen i.e., Mekonomen and Humble Group go up and down completely randomly.
Pair Corralation between Mekonomen and Humble Group
Assuming the 90 days trading horizon Mekonomen AB is expected to under-perform the Humble Group. But the stock apears to be less risky and, when comparing its historical volatility, Mekonomen AB is 1.49 times less risky than Humble Group. The stock trades about -0.17 of its potential returns per unit of risk. The Humble Group AB is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,245 in Humble Group AB on October 30, 2024 and sell it today you would lose (45.00) from holding Humble Group AB or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Mekonomen AB vs. Humble Group AB
Performance |
| Timeline |
| Mekonomen AB |
| Humble Group AB |
Mekonomen and Humble Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and Humble Group
The main advantage of trading using opposite Mekonomen and Humble Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, Humble 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 Humble Group will offset losses from the drop in Humble Group's long position.| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab AB |
| Humble Group vs. Samhllsbyggnadsbolaget i Norden | Humble Group vs. Media and Games | Humble Group vs. Hexatronic Group AB | Humble Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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