Correlation Between AP Moeller and AP Mller

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

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

Diversification Opportunities for AP Moeller and AP Mller

0.97

Correlation Coefficient

AP Moeller  AP Mller

Almost no diversification

The 3 months correlation between AMKBY and AMKBF is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller Maersk AS and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Mller 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 Maersk AS are associated (or correlated) with AP Mller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Mller has no effect on the direction of AP Moeller i.e., AP Moeller and AP Mller go up and down completely randomly.

Pair Corralation between AP Moeller and AP Mller

Assuming the 90 days horizon AP Moeller is expected to generate 7.42 times less return on investment than AP Mller. But when comparing it to its historical volatility, AP Moeller Maersk AS is 1.25 times less risky than AP Mller. It trades about 0.01 of its potential returns per unit of risk. AP Mller is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  132,000  in AP Mller on January 20, 2024 and sell it today you would earn a total of  3,000  from holding AP Mller or generate 2.27% return on investment over 90 days.

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

AP Moeller Maersk AS  vs.  AP Mller

AP Moeller Maersk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AP Moeller Maersk AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

AP Mller

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AP Mller has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AP Moeller and AP Mller

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

The idea behind AP Moeller Maersk AS and AP Mller 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 Anywhere module to track or share privately all of your investments from the convenience of any device.