Correlation Between Castor Maritime and AP Moeller

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

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

Diversification Opportunities for Castor Maritime and AP Moeller

-0.4

Correlation Coefficient

Castor Maritime  AP Moeller

Very good diversification

The 3 months correlation between Castor and AMKAF is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Castor Maritime and AP Moeller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller and Castor Maritime 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 Castor Maritime 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 Castor Maritime i.e., Castor Maritime and AP Moeller go up and down completely randomly.

Pair Corralation between Castor Maritime and AP Moeller

Given the investment horizon of 90 days Castor Maritime is expected to generate 10.83 times less return on investment than AP Moeller. But when comparing it to its historical volatility, Castor Maritime is 1.04 times less risky than AP Moeller. It trades about 0.0 of its potential returns per unit of risk. AP Moeller is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  150,894  in AP Moeller on October 15, 2024 and sell it today you would earn a total of  1,806  from holding AP Moeller or generate 1.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.75%
Values	Daily Returns

Castor Maritime  vs.  AP Moeller

Castor Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castor Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

AP Moeller

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, AP Moeller may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Castor Maritime and AP Moeller

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

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.