Correlation Between MPC Container and Aker Horizons
Can any of the company-specific risk be diversified away by investing in both MPC Container and Aker Horizons 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 Horizons 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 Horizons AS, you can compare the effects of market volatilities on MPC Container and Aker Horizons 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 Horizons. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPC Container and Aker Horizons.
Diversification Opportunities for MPC Container and Aker Horizons
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between MPC and Aker is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding MPC Container Ships and Aker Horizons AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Horizons AS 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 Horizons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Horizons AS has no effect on the direction of MPC Container i.e., MPC Container and Aker Horizons go up and down completely randomly.
Pair Corralation between MPC Container and Aker Horizons
Assuming the 90 days trading horizon MPC Container Ships is expected to under-perform the Aker Horizons. But the stock apears to be less risky and, when comparing its historical volatility, MPC Container Ships is 3.0 times less risky than Aker Horizons. The stock trades about -0.36 of its potential returns per unit of risk. The Aker Horizons AS is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 248.00 in Aker Horizons AS on November 4, 2024 and sell it today you would lose (37.00) from holding Aker Horizons AS or give up 14.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MPC Container Ships vs. Aker Horizons AS
Performance |
| Timeline |
| MPC Container Ships |
| Aker Horizons AS |
MPC Container and Aker Horizons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPC Container and Aker Horizons
The main advantage of trading using opposite MPC Container and Aker Horizons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPC Container position performs unexpectedly, Aker Horizons 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 Horizons will offset losses from the drop in Aker Horizons' long position.| MPC Container vs. 2020 Bulkers | MPC Container vs. Belships | MPC Container vs. BW LPG | MPC Container vs. REC Silicon ASA |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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