Correlation Between Enersize and Mekonomen

Can any of the company-specific risk be diversified away by investing in both Enersize 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 Enersize and Mekonomen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enersize Oy and Mekonomen AB, you can compare the effects of market volatilities on Enersize 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 Enersize with a short position of Mekonomen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersize and Mekonomen.

Diversification Opportunities for Enersize and Mekonomen

-0.02

Correlation Coefficient

Enersize  Mekonomen

Good diversification

The 3 months correlation between Enersize and Mekonomen is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Enersize Oy and Mekonomen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekonomen AB and Enersize 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 Enersize Oy 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 Enersize i.e., Enersize and Mekonomen go up and down completely randomly.

Pair Corralation between Enersize and Mekonomen

Assuming the 90 days trading horizon Enersize Oy is expected to under-perform the Mekonomen. In addition to that, Enersize is 2.89 times more volatile than Mekonomen AB. It trades about -0.24 of its total potential returns per unit of risk. Mekonomen AB is currently generating about -0.02 per unit of volatility. If you would invest  13,200  in Mekonomen AB on September 25, 2024 and sell it today you would lose (140.00) from holding Mekonomen AB or give up 1.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Enersize Oy  vs.  Mekonomen AB

Enersize Oy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enersize Oy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mekonomen AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mekonomen AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mekonomen is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Enersize and Mekonomen

The main advantage of trading using opposite Enersize and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersize 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.

The idea behind Enersize Oy and Mekonomen AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.