Correlation Between AP Moeller and American Shipping
Can any of the company-specific risk be diversified away by investing in both AP Moeller 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 Moeller 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 Moeller Maersk AS and American Shipping, you can compare the effects of market volatilities on AP Moeller 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 Moeller with a short position of American Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller and American Shipping.
Diversification Opportunities for AP Moeller and American Shipping
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMKBY and American is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller Maersk AS and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping 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 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 Moeller i.e., AP Moeller and American Shipping go up and down completely randomly.
Pair Corralation between AP Moeller and American Shipping
Assuming the 90 days horizon AP Moeller Maersk AS is expected to generate 2.37 times more return on investment than American Shipping. However, AP Moeller is 2.37 times more volatile than American Shipping. It trades about 0.14 of its potential returns per unit of risk. American Shipping is currently generating about -0.25 per unit of risk. If you would invest 738.00 in AP Moeller Maersk AS on August 30, 2024 and sell it today you would earn a total of 70.00 from holding AP Moeller Maersk AS or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Moeller Maersk AS vs. American Shipping
Performance |
| Timeline |
| AP Moeller Maersk |
| American Shipping |
AP Moeller and American Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Moeller and American Shipping
The main advantage of trading using opposite AP Moeller and American Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Moeller 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 Moeller vs. Hapag Lloyd Aktiengesellschaft | AP Moeller vs. Nippon Yusen Kabushiki | AP Moeller vs. COSCO SHIPPING Holdings | AP Moeller vs. AP Moeller |
| American Shipping vs. AP Moeller Maersk AS | American Shipping vs. AP Mller | American Shipping vs. AP Moeller | American Shipping vs. COSCO SHIPPING Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |