Correlation Between AP Moeller and Seaboard
Can any of the company-specific risk be diversified away by investing in both AP Moeller and Seaboard 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 Moeller and Seaboard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Moeller and Seaboard, you can compare the effects of market volatilities on AP Moeller and Seaboard 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 Moeller with a short position of Seaboard. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller and Seaboard.
Diversification Opportunities for AP Moeller and Seaboard
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMKAF and Seaboard is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard and AP Moeller 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 Moeller are associated (or correlated) with Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of AP Moeller i.e., AP Moeller and Seaboard go up and down completely randomly.
Pair Corralation between AP Moeller and Seaboard
Assuming the 90 days horizon AP Moeller is expected to generate 1.8 times more return on investment than Seaboard. However, AP Moeller is 1.8 times more volatile than Seaboard. It trades about 0.14 of its potential returns per unit of risk. Seaboard is currently generating about 0.08 per unit of risk. If you would invest 130,900 in AP Moeller on January 24, 2024 and sell it today you would earn a total of 10,271 from holding AP Moeller or generate 7.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
AP Moeller vs. Seaboard
Performance |
Timeline |
AP Moeller |
Seaboard |
AP Moeller and Seaboard Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AP Moeller and Seaboard
The main advantage of trading using opposite AP Moeller and Seaboard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Moeller position performs unexpectedly, Seaboard 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 Seaboard will offset losses from the drop in Seaboard's long position.AP Moeller vs. Hapag Lloyd Aktiengesellschaft | AP Moeller vs. Hapag Lloyd Aktiengesellschaft | AP Moeller vs. AP Moeller Maersk AS | AP Moeller vs. Hafnia Limited |
Seaboard vs. DatChat | Seaboard vs. MMTEC Inc | Seaboard vs. Creative Realities | Seaboard vs. Marin Software |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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