Correlation Between AP Moeller and SITC International
Can any of the company-specific risk be diversified away by investing in both AP Moeller and SITC International 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 SITC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Moeller and SITC International Holdings, you can compare the effects of market volatilities on AP Moeller and SITC International 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 SITC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller and SITC International.
Diversification Opportunities for AP Moeller and SITC International
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AMKAF and SITC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller and SITC International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITC International 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 SITC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITC International has no effect on the direction of AP Moeller i.e., AP Moeller and SITC International go up and down completely randomly.
Pair Corralation between AP Moeller and SITC International
Assuming the 90 days horizon AP Moeller is expected to generate 4.79 times less return on investment than SITC International. But when comparing it to its historical volatility, AP Moeller is 1.69 times less risky than SITC International. It trades about 0.05 of its potential returns per unit of risk. SITC International Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 65.00 in SITC International Holdings on August 27, 2024 and sell it today you would earn a total of 173.00 from holding SITC International Holdings or generate 266.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Moeller vs. SITC International Holdings
Performance |
| Timeline |
| AP Moeller |
| SITC International |
AP Moeller and SITC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Moeller and SITC International
The main advantage of trading using opposite AP Moeller and SITC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Moeller position performs unexpectedly, SITC International 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 SITC International will offset losses from the drop in SITC International'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. SITC International Holdings |
| SITC International vs. AP Mller | SITC International vs. COSCO SHIPPING Holdings | SITC International vs. Orient Overseas Limited |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |