Correlation Between AP Mller and Handelsinvest Danske

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

By analyzing existing cross correlation between AP Mller and Handelsinvest Danske Obligationer, you can compare the effects of market volatilities on AP Mller and Handelsinvest Danske 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 Handelsinvest Danske. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and Handelsinvest Danske.

Diversification Opportunities for AP Mller and Handelsinvest Danske

0.76

Correlation Coefficient

AP Mller  Handelsinvest Danske

Poor diversification

The 3 months correlation between MAERSK-B and Handelsinvest is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and Handelsinvest Danske Obligatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handelsinvest Danske 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 Handelsinvest Danske. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handelsinvest Danske has no effect on the direction of AP Mller i.e., AP Mller and Handelsinvest Danske go up and down completely randomly.

Pair Corralation between AP Mller and Handelsinvest Danske

Assuming the 90 days trading horizon AP Mller is expected to generate 25.14 times more return on investment than Handelsinvest Danske. However, AP Mller is 25.14 times more volatile than Handelsinvest Danske Obligationer. It trades about 0.04 of its potential returns per unit of risk. Handelsinvest Danske Obligationer is currently generating about 0.16 per unit of risk. If you would invest  1,094,000  in AP Mller on September 22, 2024 and sell it today you would earn a total of  52,000  from holding AP Mller or generate 4.75% return on investment over 90 days.

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

AP Mller   vs.  Handelsinvest Danske Obligatio

AP Mller

Risk-Adjusted Performance

3 of 100

Insignificant

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

Handelsinvest Danske

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Handelsinvest Danske Obligationer are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Handelsinvest Danske is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AP Mller and Handelsinvest Danske

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

The idea behind AP Mller and Handelsinvest Danske Obligationer 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.