Correlation Between AP Mller and Aalborg Boldspilklub

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

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

Diversification Opportunities for AP Mller and Aalborg Boldspilklub

-0.79

Correlation Coefficient

AP Mller  Aalborg Boldspilklub

Pay attention - limited upside

The 3 months correlation between MAERSK-A and Aalborg is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and Aalborg Boldspilklub AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalborg Boldspilklub and AP Mller 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 Mller are associated (or correlated) with Aalborg Boldspilklub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalborg Boldspilklub has no effect on the direction of AP Mller i.e., AP Mller and Aalborg Boldspilklub go up and down completely randomly.

Pair Corralation between AP Mller and Aalborg Boldspilklub

Assuming the 90 days trading horizon AP Mller is expected to generate 1.17 times more return on investment than Aalborg Boldspilklub. However, AP Mller is 1.17 times more volatile than Aalborg Boldspilklub AS. It trades about 0.15 of its potential returns per unit of risk. Aalborg Boldspilklub AS is currently generating about -0.12 per unit of risk. If you would invest  959,500  in AP Mller on September 5, 2024 and sell it today you would earn a total of  250,500  from holding AP Mller or generate 26.11% return on investment over 90 days.

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

AP Mller   vs.  Aalborg Boldspilklub AS

AP Mller

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, AP Mller sustained solid returns over the last few months and may actually be approaching a breakup point.

Aalborg Boldspilklub

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AP Mller and Aalborg Boldspilklub

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

The idea behind AP Mller and Aalborg Boldspilklub AS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..