Correlation Between AP Mller and Hapag Lloyd

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

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

Diversification Opportunities for AP Mller and Hapag Lloyd

0.26

Correlation Coefficient

AP Mller  Hapag Lloyd

Modest diversification

The 3 months correlation between AMKBF and Hapag is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and Hapag Lloyd Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag Lloyd Aktienge and AP Mller 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 Mller are associated (or correlated) with Hapag Lloyd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag Lloyd Aktienge has no effect on the direction of AP Mller i.e., AP Mller and Hapag Lloyd go up and down completely randomly.

Pair Corralation between AP Mller and Hapag Lloyd

Assuming the 90 days horizon AP Mller is expected to under-perform the Hapag Lloyd. But the pink sheet apears to be less risky and, when comparing its historical volatility, AP Mller is 1.09 times less risky than Hapag Lloyd. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Hapag Lloyd Aktiengesellschaft is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  16,000  in Hapag Lloyd Aktiengesellschaft on September 24, 2024 and sell it today you would lose (463.00) from holding Hapag Lloyd Aktiengesellschaft or give up 2.89% of portfolio value over 90 days.

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

AP Mller   vs.  Hapag Lloyd Aktiengesellschaft

AP Mller

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AP Mller has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, AP Mller is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Hapag Lloyd Aktienge

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hapag Lloyd Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Hapag Lloyd is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AP Mller and Hapag Lloyd

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

The idea behind AP Mller and Hapag Lloyd Aktiengesellschaft 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.