Correlation Between MPC Container and Aker Carbon
Can any of the company-specific risk be diversified away by investing in both MPC Container and Aker Carbon 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 MPC Container and Aker Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPC Container Ships and Aker Carbon Capture, you can compare the effects of market volatilities on MPC Container and Aker Carbon 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 MPC Container with a short position of Aker Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPC Container and Aker Carbon.
Diversification Opportunities for MPC Container and Aker Carbon
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between MPC and Aker is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding MPC Container Ships and Aker Carbon Capture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Carbon Capture and MPC Container 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 MPC Container Ships are associated (or correlated) with Aker Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Carbon Capture has no effect on the direction of MPC Container i.e., MPC Container and Aker Carbon go up and down completely randomly.
Pair Corralation between MPC Container and Aker Carbon
Assuming the 90 days trading horizon MPC Container Ships is expected to generate 1.64 times more return on investment than Aker Carbon. However, MPC Container is 1.64 times more volatile than Aker Carbon Capture. It trades about 0.15 of its potential returns per unit of risk. Aker Carbon Capture is currently generating about -0.13 per unit of risk. If you would invest 2,341 in MPC Container Ships on August 25, 2024 and sell it today you would earn a total of 220.00 from holding MPC Container Ships or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MPC Container Ships vs. Aker Carbon Capture
Performance |
| Timeline |
| MPC Container Ships |
| Aker Carbon Capture |
MPC Container and Aker Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPC Container and Aker Carbon
The main advantage of trading using opposite MPC Container and Aker Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPC Container position performs unexpectedly, Aker Carbon 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 Aker Carbon will offset losses from the drop in Aker Carbon's long position.| MPC Container vs. 2020 Bulkers | MPC Container vs. Belships | MPC Container vs. BW LPG | MPC Container vs. REC Silicon ASA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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