Correlation Between AP Moeller and AP Mller

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

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

Diversification Opportunities for AP Moeller and AP Mller

0.87

Correlation Coefficient

AP Moeller  AP Mller

Very poor diversification

The 3 months correlation between AMKBY and AMKBF is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller Maersk AS and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Mller 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 Maersk AS are associated (or correlated) with AP Mller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Mller has no effect on the direction of AP Moeller i.e., AP Moeller and AP Mller go up and down completely randomly.

Pair Corralation between AP Moeller and AP Mller

Assuming the 90 days horizon AP Moeller Maersk AS is expected to generate 1.03 times more return on investment than AP Mller. However, AP Moeller is 1.03 times more volatile than AP Mller . It trades about 0.1 of its potential returns per unit of risk. AP Mller is currently generating about 0.08 per unit of risk. If you would invest  737.00  in AP Moeller Maersk AS on September 4, 2024 and sell it today you would earn a total of  124.00  from holding AP Moeller Maersk AS or generate 16.82% return on investment over 90 days.

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

AP Moeller Maersk AS  vs.  AP Mller

AP Moeller Maersk

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller Maersk AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental drivers, AP Moeller showed solid returns over the last few months and may actually be approaching a breakup point.

AP Mller

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, AP Mller reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AP Moeller and AP Mller

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

The idea behind AP Moeller Maersk AS and AP Mller 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.