Correlation Between AP Mller and Nippon Yusen
Can any of the company-specific risk be diversified away by investing in both AP Mller and Nippon Yusen 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 Nippon Yusen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and Nippon Yusen Kabushiki, you can compare the effects of market volatilities on AP Mller and Nippon Yusen 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 Nippon Yusen. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and Nippon Yusen.
Diversification Opportunities for AP Mller and Nippon Yusen
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMKBF and Nippon is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and Nippon Yusen Kabushiki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Yusen Kabushiki 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 Nippon Yusen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Yusen Kabushiki has no effect on the direction of AP Mller i.e., AP Mller and Nippon Yusen go up and down completely randomly.
Pair Corralation between AP Mller and Nippon Yusen
Assuming the 90 days horizon AP Mller is expected to generate 2.63 times more return on investment than Nippon Yusen. However, AP Mller is 2.63 times more volatile than Nippon Yusen Kabushiki. It trades about 0.04 of its potential returns per unit of risk. Nippon Yusen Kabushiki is currently generating about 0.07 per unit of risk. If you would invest 212,000 in AP Mller on August 25, 2024 and sell it today you would lose (39,000) from holding AP Mller or give up 18.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 7.98% |
| Values | Daily Returns |
AP Mller vs. Nippon Yusen Kabushiki
Performance |
| Timeline |
| AP Mller |
| Nippon Yusen Kabushiki |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AP Mller and Nippon Yusen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Mller and Nippon Yusen
The main advantage of trading using opposite AP Mller and Nippon Yusen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Mller position performs unexpectedly, Nippon Yusen 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 Nippon Yusen will offset losses from the drop in Nippon Yusen's long position.| AP Mller vs. Mitsui OSK Lines | AP Mller vs. Hapag Lloyd Aktiengesellschaft | AP Mller vs. Orient Overseas Limited | AP Mller vs. Hapag Lloyd Aktiengesellschaft |
| Nippon Yusen vs. Mitsui OSK Lines | Nippon Yusen vs. SITC International Holdings | Nippon Yusen vs. Orient Overseas Limited | Nippon Yusen vs. Western Bulk Chartering |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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