Correlation Between Mekonomen and Coala Life

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

By analyzing existing cross correlation between Mekonomen AB and Coala Life Group, you can compare the effects of market volatilities on Mekonomen and Coala Life 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 Coala Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and Coala Life.

Diversification Opportunities for Mekonomen and Coala Life

0.0

Correlation Coefficient

Mekonomen  Coala Life

Pay attention - limited upside

The 3 months correlation between Mekonomen and Coala is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and Coala Life Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coala Life Group 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 Coala Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coala Life Group has no effect on the direction of Mekonomen i.e., Mekonomen and Coala Life go up and down completely randomly.

Pair Corralation between Mekonomen and Coala Life

If you would invest  1.73  in Coala Life Group on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Coala Life Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	9.52%
Values	Daily Returns

Mekonomen AB  vs.  Coala Life Group

Mekonomen AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mekonomen AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mekonomen is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Coala Life Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coala Life Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Coala Life 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 Mekonomen and Coala Life

The main advantage of trading using opposite Mekonomen and Coala Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen position performs unexpectedly, Coala Life 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 Coala Life will offset losses from the drop in Coala Life's long position.

The idea behind Mekonomen AB and Coala Life Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.