Correlation Between AP Moeller-Maersk and CHKEZ Old

Can any of the company-specific risk be diversified away by investing in both AP Moeller-Maersk and CHKEZ Old 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-Maersk and CHKEZ Old 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 CHKEZ Old, you can compare the effects of market volatilities on AP Moeller-Maersk and CHKEZ Old 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-Maersk with a short position of CHKEZ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller-Maersk and CHKEZ Old.

Diversification Opportunities for AP Moeller-Maersk and CHKEZ Old

0.0

Correlation Coefficient

AP Moeller-Maersk  CHKEZ Old

Pay attention - limited upside

The 3 months correlation between AMKBY and CHKEZ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller Maersk AS and CHKEZ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEZ Old and AP Moeller-Maersk 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 CHKEZ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEZ Old has no effect on the direction of AP Moeller-Maersk i.e., AP Moeller-Maersk and CHKEZ Old go up and down completely randomly.

Pair Corralation between AP Moeller-Maersk and CHKEZ Old

If you would invest  795.00  in AP Moeller Maersk AS on December 20, 2024 and sell it today you would earn a total of  140.00  from holding AP Moeller Maersk AS or generate 17.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AP Moeller Maersk AS  vs.  CHKEZ Old

AP Moeller Maersk

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller Maersk AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental drivers, AP Moeller-Maersk showed solid returns over the last few months and may actually be approaching a breakup point.

CHKEZ Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHKEZ Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, CHKEZ Old is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AP Moeller-Maersk and CHKEZ Old

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

The idea behind AP Moeller Maersk AS and CHKEZ Old 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.