Correlation Between GRIT Real and AP Moeller

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

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

Diversification Opportunities for GRIT Real and AP Moeller

-0.9

Correlation Coefficient

GRIT Real  AP Moeller

Pay attention - limited upside

The 3 months correlation between GRIT and 0O77 is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding GRIT Real Estate and AP Moeller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller and GRIT Real 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 GRIT Real Estate 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 GRIT Real i.e., GRIT Real and AP Moeller go up and down completely randomly.

Pair Corralation between GRIT Real and AP Moeller

Assuming the 90 days trading horizon GRIT Real Estate is expected to under-perform the AP Moeller. But the stock apears to be less risky and, when comparing its historical volatility, GRIT Real Estate is 1.08 times less risky than AP Moeller. The stock trades about -0.07 of its potential returns per unit of risk. The AP Moeller is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,250,575  in AP Moeller on October 5, 2024 and sell it today you would lose (57,075) from holding AP Moeller or give up 4.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

GRIT Real Estate  vs.  AP Moeller

GRIT Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIT Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 GRIT Real and AP Moeller

The main advantage of trading using opposite GRIT Real and AP Moeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIT Real 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 GRIT Real Estate 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.