Correlation Between AP Moeller and Caravelle International

Can any of the company-specific risk be diversified away by investing in both AP Moeller and Caravelle International 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 Moeller and Caravelle International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AP Moeller and Caravelle International Group, you can compare the effects of market volatilities on AP Moeller and Caravelle International 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 Moeller with a short position of Caravelle International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller and Caravelle International.

Diversification Opportunities for AP Moeller and Caravelle International

-0.49

Correlation Coefficient

AP Moeller  Caravelle International

Very good diversification

The 3 months correlation between AMKAF and Caravelle is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller and Caravelle International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravelle International and AP Moeller 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 Moeller are associated (or correlated) with Caravelle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caravelle International has no effect on the direction of AP Moeller i.e., AP Moeller and Caravelle International go up and down completely randomly.

Pair Corralation between AP Moeller and Caravelle International

If you would invest  159,304  in AP Moeller on September 13, 2024 and sell it today you would lose (2,304) from holding AP Moeller or give up 1.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

AP Moeller   vs.  Caravelle International Group

AP Moeller

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AP Moeller reported solid returns over the last few months and may actually be approaching a breakup point.

Caravelle International

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Caravelle International Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unsteady fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AP Moeller and Caravelle International

The main advantage of trading using opposite AP Moeller and Caravelle International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Moeller position performs unexpectedly, Caravelle International 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 Caravelle International will offset losses from the drop in Caravelle International's long position.

The idea behind AP Moeller and Caravelle International Group 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.