Correlation Between Mekonomen and MAG Interactive
Can any of the company-specific risk be diversified away by investing in both Mekonomen and MAG Interactive 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 MAG Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and MAG Interactive AB, you can compare the effects of market volatilities on Mekonomen and MAG Interactive 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 MAG Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and MAG Interactive.
Diversification Opportunities for Mekonomen and MAG Interactive
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mekonomen and MAG is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and MAG Interactive AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG Interactive 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 MAG Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG Interactive AB has no effect on the direction of Mekonomen i.e., Mekonomen and MAG Interactive go up and down completely randomly.
Pair Corralation between Mekonomen and MAG Interactive
Assuming the 90 days trading horizon Mekonomen AB is expected to under-perform the MAG Interactive. But the stock apears to be less risky and, when comparing its historical volatility, Mekonomen AB is 2.78 times less risky than MAG Interactive. The stock trades about -0.01 of its potential returns per unit of risk. The MAG Interactive AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 964.00 in MAG Interactive AB on October 21, 2024 and sell it today you would earn a total of 106.00 from holding MAG Interactive AB or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mekonomen AB vs. MAG Interactive AB
Performance |
| Timeline |
| Mekonomen AB |
| MAG Interactive AB |
Mekonomen and MAG Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and MAG Interactive
The main advantage of trading using opposite Mekonomen and MAG Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, MAG Interactive 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 MAG Interactive will offset losses from the drop in MAG Interactive's long position.| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab AB |
| MAG Interactive vs. Idogen AB | MAG Interactive vs. Clean Motion AB | MAG Interactive vs. Arion banki hf | MAG Interactive 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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