Correlation Between Proact IT and Mekonomen

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

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

Diversification Opportunities for Proact IT and Mekonomen

0.6

Correlation Coefficient

Proact IT  Mekonomen

Poor diversification

The 3 months correlation between Proact and Mekonomen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Proact IT Group and Mekonomen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekonomen AB and Proact IT 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 Proact IT Group 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 Proact IT i.e., Proact IT and Mekonomen go up and down completely randomly.

Pair Corralation between Proact IT and Mekonomen

Assuming the 90 days trading horizon Proact IT Group is expected to under-perform the Mekonomen. In addition to that, Proact IT is 1.09 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 -0.08 per unit of volatility. If you would invest  12,141  in Mekonomen AB on April 25, 2025 and sell it today you would lose (961.00) from holding Mekonomen AB or give up 7.92% of portfolio value over 90 days.

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

Proact IT Group  vs.  Mekonomen AB

Proact IT Group

Risk-Adjusted Performance

Very Weak

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

Mekonomen AB

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Proact IT and Mekonomen

The main advantage of trading using opposite Proact IT and Mekonomen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proact IT 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 Proact IT Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.