Correlation Between Chocoladefabriken and AP Moeller

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

By analyzing existing cross correlation between Chocoladefabriken Lindt Spruengli and AP Moeller , you can compare the effects of market volatilities on Chocoladefabriken and AP Moeller 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 Chocoladefabriken with a short position of AP Moeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and AP Moeller.

Diversification Opportunities for Chocoladefabriken and AP Moeller

0.72

Correlation Coefficient

Chocoladefabriken  AP Moeller

Poor diversification

The 3 months correlation between Chocoladefabriken and 0O77 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and AP Moeller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller and Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli are associated (or correlated) with AP Moeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Moeller has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and AP Moeller go up and down completely randomly.

Pair Corralation between Chocoladefabriken and AP Moeller

Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to generate 0.53 times more return on investment than AP Moeller. However, Chocoladefabriken Lindt Spruengli is 1.87 times less risky than AP Moeller. It trades about 0.16 of its potential returns per unit of risk. AP Moeller is currently generating about 0.08 per unit of risk. If you would invest  10,000,000  in Chocoladefabriken Lindt Spruengli on December 28, 2024 and sell it today you would earn a total of  1,536,700  from holding Chocoladefabriken Lindt Spruengli or generate 15.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Chocoladefabriken Lindt Spruen  vs.  AP Moeller

Chocoladefabriken Lindt

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Spruengli are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chocoladefabriken unveiled solid returns over the last few months and may actually be approaching a breakup point.

AP Moeller

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AP Moeller unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chocoladefabriken and AP Moeller

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

The idea behind Chocoladefabriken Lindt Spruengli and AP Moeller 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..