Correlation Between Svenska Handelsbanken and Mekonomen
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Mekonomen 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 Svenska Handelsbanken and Mekonomen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken AB and Mekonomen AB, you can compare the effects of market volatilities on Svenska Handelsbanken and Mekonomen 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 Svenska Handelsbanken with a short position of Mekonomen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Mekonomen.
Diversification Opportunities for Svenska Handelsbanken and Mekonomen
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Svenska and Mekonomen is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Mekonomen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekonomen AB and Svenska Handelsbanken 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 Svenska Handelsbanken AB are associated (or correlated) with Mekonomen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mekonomen AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Mekonomen go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Mekonomen
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to under-perform the Mekonomen. In addition to that, Svenska Handelsbanken is 1.24 times more volatile than Mekonomen AB. It trades about -0.15 of its total potential returns per unit of risk. Mekonomen AB is currently generating about -0.04 per unit of volatility. If you would invest 12,380 in Mekonomen AB on January 24, 2025 and sell it today you would lose (280.00) from holding Mekonomen AB or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Mekonomen AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| Mekonomen AB |
Svenska Handelsbanken and Mekonomen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Mekonomen
The main advantage of trading using opposite Svenska Handelsbanken and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Mekonomen 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 Mekonomen will offset losses from the drop in Mekonomen's long position.| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company AB |
| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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