Correlation Between AP Møller and Ontex Group
Can any of the company-specific risk be diversified away by investing in both AP Møller and Ontex Group 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 Ontex Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and Ontex Group NV, you can compare the effects of market volatilities on AP Møller and Ontex Group 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 Ontex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Møller and Ontex Group.
Diversification Opportunities for AP Møller and Ontex Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DP4B and Ontex is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and Ontex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontex Group NV 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 Ontex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontex Group NV has no effect on the direction of AP Møller i.e., AP Møller and Ontex Group go up and down completely randomly.
Pair Corralation between AP Møller and Ontex Group
Assuming the 90 days trading horizon AP Mller is expected to generate 2.89 times more return on investment than Ontex Group. However, AP Møller is 2.89 times more volatile than Ontex Group NV. It trades about 0.07 of its potential returns per unit of risk. Ontex Group NV is currently generating about 0.03 per unit of risk. If you would invest 85,404 in AP Mller on August 26, 2024 and sell it today you would earn a total of 74,046 from holding AP Mller or generate 86.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Mller vs. Ontex Group NV
Performance |
| Timeline |
| AP Møller |
| Ontex Group NV |
AP Møller and Ontex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Møller and Ontex Group
The main advantage of trading using opposite AP Møller and Ontex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Møller position performs unexpectedly, Ontex Group 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 Ontex Group will offset losses from the drop in Ontex Group's long position.| AP Møller vs. ADRIATIC METALS LS 013355 | AP Møller vs. UNITED RENTALS | AP Møller vs. Solstad Offshore ASA | AP Møller vs. Lion One Metals |
| Ontex Group vs. The Procter Gamble | Ontex Group vs. Superior Plus Corp | Ontex Group vs. Origin Agritech | Ontex Group vs. Identiv |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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