Correlation Between AP Moeller and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AP Moeller and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on AP Moeller and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller and Dow Jones.
Diversification Opportunities for AP Moeller and Dow Jones
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMKBY and Dow is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller Maersk AS and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of AP Moeller i.e., AP Moeller and Dow Jones go up and down completely randomly.
Pair Corralation between AP Moeller and Dow Jones
Assuming the 90 days horizon AP Moeller Maersk AS is expected to generate 3.36 times more return on investment than Dow Jones. However, AP Moeller is 3.36 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 754.00 in AP Moeller Maersk AS on August 28, 2024 and sell it today you would earn a total of 59.00 from holding AP Moeller Maersk AS or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Moeller Maersk AS vs. Dow Jones Industrial
Performance |
| Timeline |
AP Moeller and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AP Moeller Maersk AS
Pair trading matchups for AP Moeller
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AP Moeller and Dow Jones
The main advantage of trading using opposite AP Moeller and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Moeller position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| AP Moeller vs. AP Mller | AP Moeller vs. COSCO SHIPPING Holdings | AP Moeller vs. Orient Overseas Limited |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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