Correlation Between AP Mller and American Shipping
Can any of the company-specific risk be diversified away by investing in both AP Mller and American Shipping 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 American Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and American Shipping, you can compare the effects of market volatilities on AP Mller and American Shipping 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 American Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and American Shipping.
Diversification Opportunities for AP Mller and American Shipping
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMKBF and American is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping 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 American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of AP Mller i.e., AP Mller and American Shipping go up and down completely randomly.
Pair Corralation between AP Mller and American Shipping
Assuming the 90 days horizon AP Mller is expected to generate 26.35 times less return on investment than American Shipping. But when comparing it to its historical volatility, AP Mller is 6.42 times less risky than American Shipping. It trades about 0.04 of its potential returns per unit of risk. American Shipping is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 444.00 in American Shipping on August 26, 2024 and sell it today you would lose (208.00) from holding American Shipping or give up 46.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.26% |
| Values | Daily Returns |
AP Mller vs. American Shipping
Performance |
| Timeline |
| AP Mller |
| American Shipping |
AP Mller and American Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Mller and American Shipping
The main advantage of trading using opposite AP Mller and American Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Mller position performs unexpectedly, American Shipping 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 American Shipping will offset losses from the drop in American Shipping's long position.| AP Mller vs. Hapag Lloyd Aktiengesellschaft | AP Mller vs. COSCO SHIPPING Holdings | AP Mller vs. Orient Overseas Limited |
| American Shipping vs. Western Bulk Chartering | American Shipping vs. AP Moeller | American Shipping vs. AP Mller | American Shipping vs. Pacific Basin Shipping |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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