Correlation Between Abrdn Property and AP Moeller

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

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

Diversification Opportunities for Abrdn Property and AP Moeller

0.74

Correlation Coefficient

Abrdn Property  AP Moeller

Poor diversification

The 3 months correlation between Abrdn and 0O77 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Property Income and AP Moeller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller and Abrdn Property 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 abrdn Property Income 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 Abrdn Property i.e., Abrdn Property and AP Moeller go up and down completely randomly.

Pair Corralation between Abrdn Property and AP Moeller

Assuming the 90 days trading horizon abrdn Property Income is expected to generate 17.94 times more return on investment than AP Moeller. However, Abrdn Property is 17.94 times more volatile than AP Moeller . It trades about 0.04 of its potential returns per unit of risk. AP Moeller is currently generating about 0.01 per unit of risk. If you would invest  495.00  in abrdn Property Income on October 5, 2024 and sell it today you would earn a total of  185.00  from holding abrdn Property Income or generate 37.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

abrdn Property Income  vs.  AP Moeller

abrdn Property Income

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Property Income are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Abrdn Property exhibited solid returns over the last few months and may actually be approaching a breakup point.

AP Moeller

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AP Moeller unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abrdn Property and AP Moeller

The main advantage of trading using opposite Abrdn Property and AP Moeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Property 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 abrdn Property Income 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.