Correlation Between AP Moeller and Euroseas

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

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

Diversification Opportunities for AP Moeller and Euroseas

-0.18

Correlation Coefficient

AP Moeller  Euroseas

Good diversification

The 3 months correlation between AMKAF and Euroseas is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller and Euroseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euroseas and AP Moeller 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 AP Moeller are associated (or correlated) with Euroseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euroseas has no effect on the direction of AP Moeller i.e., AP Moeller and Euroseas go up and down completely randomly.

Pair Corralation between AP Moeller and Euroseas

Assuming the 90 days horizon AP Moeller is expected to under-perform the Euroseas. In addition to that, AP Moeller is 1.13 times more volatile than Euroseas. It trades about 0.0 of its total potential returns per unit of risk. Euroseas is currently generating about 0.01 per unit of volatility. If you would invest  3,467  in Euroseas on September 24, 2024 and sell it today you would lose (45.00) from holding Euroseas or give up 1.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

AP Moeller   vs.  Euroseas

AP Moeller

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AP Moeller is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Euroseas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Euroseas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AP Moeller and Euroseas

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

The idea behind AP Moeller and Euroseas 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.