Correlation Between Orient Overseas and AP Moeller
Can any of the company-specific risk be diversified away by investing in both Orient Overseas 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 Orient Overseas and AP Moeller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Overseas International and AP Moeller Maersk AS, you can compare the effects of market volatilities on Orient Overseas 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 Orient Overseas with a short position of AP Moeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Overseas and AP Moeller.
Diversification Opportunities for Orient Overseas and AP Moeller
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Orient and AMKBY is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Orient Overseas International 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 Orient Overseas 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 Orient Overseas International 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 Orient Overseas i.e., Orient Overseas and AP Moeller go up and down completely randomly.
Pair Corralation between Orient Overseas and AP Moeller
Assuming the 90 days horizon Orient Overseas International is expected to under-perform the AP Moeller. But the pink sheet apears to be less risky and, when comparing its historical volatility, Orient Overseas International is 1.48 times less risky than AP Moeller. The pink sheet trades about -0.04 of its potential returns per unit of risk. The AP Moeller Maersk AS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 740.00 in AP Moeller Maersk AS on August 31, 2024 and sell it today you would earn a total of 68.00 from holding AP Moeller Maersk AS or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Overseas International vs. AP Moeller Maersk AS
Performance |
| Timeline |
| Orient Overseas Inte |
| AP Moeller Maersk |
Orient Overseas and AP Moeller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Overseas and AP Moeller
The main advantage of trading using opposite Orient Overseas and AP Moeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Overseas 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.| Orient Overseas vs. Hapag Lloyd Aktiengesellschaft | Orient Overseas vs. Hapag Lloyd Aktiengesellschaft | Orient Overseas vs. AP Moeller Maersk AS | Orient Overseas vs. AP Mller |
| AP Moeller vs. Hapag Lloyd Aktiengesellschaft | AP Moeller vs. Nippon Yusen Kabushiki | AP Moeller vs. COSCO SHIPPING Holdings | AP Moeller vs. AP Moeller |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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