Correlation Between AP Møller and AWILCO LNG
Can any of the company-specific risk be diversified away by investing in both AP Møller and AWILCO LNG 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 Møller and AWILCO LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and AWILCO LNG NK, you can compare the effects of market volatilities on AP Møller and AWILCO LNG 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 Møller with a short position of AWILCO LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Møller and AWILCO LNG.
Diversification Opportunities for AP Møller and AWILCO LNG
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DP4B and AWILCO is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and AWILCO LNG NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AWILCO LNG NK and AP Møller 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 AWILCO LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AWILCO LNG NK has no effect on the direction of AP Møller i.e., AP Møller and AWILCO LNG go up and down completely randomly.
Pair Corralation between AP Møller and AWILCO LNG
Assuming the 90 days trading horizon AP Mller is expected to generate 0.39 times more return on investment than AWILCO LNG. However, AP Mller is 2.59 times less risky than AWILCO LNG. It trades about 0.23 of its potential returns per unit of risk. AWILCO LNG NK is currently generating about -0.22 per unit of risk. If you would invest 145,150 in AP Mller on September 13, 2024 and sell it today you would earn a total of 17,550 from holding AP Mller or generate 12.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AP Mller vs. AWILCO LNG NK
Performance |
| Timeline |
| AP Møller |
| AWILCO LNG NK |
AP Møller and AWILCO LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Møller and AWILCO LNG
The main advantage of trading using opposite AP Møller and AWILCO LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Møller position performs unexpectedly, AWILCO LNG 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 AWILCO LNG will offset losses from the drop in AWILCO LNG's long position.| AP Møller vs. Regions Financial | AP Møller vs. MBANK | AP Møller vs. CDN IMPERIAL BANK | AP Møller vs. REVO INSURANCE SPA |
| AWILCO LNG vs. ALTAIR RES INC | AWILCO LNG vs. HF SINCLAIR P | AWILCO LNG vs. REGAL ASIAN INVESTMENTS | AWILCO LNG vs. Altair Engineering |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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