Correlation Between Hapag-Lloyd Aktiengesellscha and AP Moeller
Can any of the company-specific risk be diversified away by investing in both Hapag-Lloyd Aktiengesellscha and AP Moeller 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 Hapag-Lloyd Aktiengesellscha and AP Moeller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hapag Lloyd Aktiengesellschaft and AP Moeller Maersk AS, you can compare the effects of market volatilities on Hapag-Lloyd Aktiengesellscha and AP Moeller 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 Hapag-Lloyd Aktiengesellscha with a short position of AP Moeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag-Lloyd Aktiengesellscha and AP Moeller.
Diversification Opportunities for Hapag-Lloyd Aktiengesellscha and AP Moeller
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hapag-Lloyd and AMKBY is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and AP Moeller Maersk AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller Maersk and Hapag-Lloyd Aktiengesellscha 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 Hapag Lloyd Aktiengesellschaft are associated (or correlated) with AP Moeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Moeller Maersk has no effect on the direction of Hapag-Lloyd Aktiengesellscha i.e., Hapag-Lloyd Aktiengesellscha and AP Moeller go up and down completely randomly.
Pair Corralation between Hapag-Lloyd Aktiengesellscha and AP Moeller
Assuming the 90 days horizon Hapag Lloyd Aktiengesellschaft is expected to under-perform the AP Moeller. In addition to that, Hapag-Lloyd Aktiengesellscha is 1.36 times more volatile than AP Moeller Maersk AS. It trades about -0.02 of its total potential returns per unit of risk. AP Moeller Maersk AS is currently generating about -0.02 per unit of volatility. If you would invest 904.00 in AP Moeller Maersk AS on August 28, 2024 and sell it today you would lose (104.00) from holding AP Moeller Maersk AS or give up 11.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Hapag Lloyd Aktiengesellschaft vs. AP Moeller Maersk AS
Performance |
| Timeline |
| Hapag-Lloyd Aktiengesellscha |
| AP Moeller Maersk |
Hapag-Lloyd Aktiengesellscha and AP Moeller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hapag-Lloyd Aktiengesellscha and AP Moeller
The main advantage of trading using opposite Hapag-Lloyd Aktiengesellscha and AP Moeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag-Lloyd Aktiengesellscha position performs unexpectedly, AP Moeller 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 AP Moeller will offset losses from the drop in AP Moeller's long position.The idea behind Hapag Lloyd Aktiengesellschaft and AP Moeller Maersk AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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